The sound of Carrie Bradshaw shrieking over a new pair of Jimmy Choos in the hit series Sex and the City may have long since faded from mainstream TV screens, but the shoe company appears to be going from strength to strength.
TowerBrook Capital Partners, the private equity firm that currently owns it, yesterday said it had appointed the investment banks Morgan Stanley and Goldman Sachs to consider "long-term strategic" options for Jimmy Choo, the maker of luxury shoes for stars including the singer Beyoncé, who has sung about "kicking it in my Jimmys".
By hiring the banks, TowerBrook has effectively put Jimmy Choo, which has 110 branded stores around the world, up for sale with a price tag of about £500m, but it will also consider an initial public offering.
Either outcome would represent a meteoric rise for the luxury brand, which was founded by Tamara Mellon, the former It-girl, in 1996, after she received a £150,000 loan from her father, Tommy Yeardye (he had himself co-founded the hair products specialist Vidal Sassoon). A sale by TowerBrook, whose purchase of a majority stake in Jimmy Choo from London-based Lion Capital in 2007 implied a value of £185m, would be the fourth such deal inside a decade.
Ms Mellon, who remains the brand's chief creative officer and is understood to retain a 17 per cent stake, could not have envisaged such as journey when she first met Jimmy Choo, a Malaysian cobbler, in Hackney, east London, and formed a partnership when working as accessories editor at Vogue magazine in the 1990s. Mr Choo sold his 50 per cent stake in the company for £10m in 2001 but he has continued to deliver exclusive ranges for the brand. While Jimmy Choo has continued to sell boots to women for as much as £1,800, it has also extended its product offer into bags, small leather goods, scarves and trainers.
But the real growth story of Jimmy Choo over the past 14 years has been the riding of a tidal wave of celebrity endorsements, as well as those gushing recommendations in Sex and the City. The series ran on the US channel HBO from 1998 to 2004, but since then two films have emerged and it is still being shown on UK cable channels. Maureen Hinton, the lead analyst at the retail consultancy Verdict, said: "It is a very good brand name that has global appeal – it is perhaps a residue from Sex and the City."
While Jimmy Choo has got lucky with some accidental celebrity endorsements, it also assiduously courted the stars and the fashion media to phenomenal effect.
Its website has an "As Worn By" section that reads like a Who's Who of A-listers. Michelle Obama, the wife of the US president, makes an appearance alongside the likes of Meryl Streep, Hilary Swank, Sandra Bullock and Madonna.
Ms Hinton added: "Jimmy Choo is attractive to celebrities but they must have pushed it to celebrities as well because that is how you keep the brand in the public's mind – most designers now want to get their shoes on the red carpet because you get so much media coverage from that." Another factor is that shoes have attracted a much higher fashion profile over the past few years.
"A lot more design has gone into shoes and Jimmy Choo has been at the helm of this," Ms Hinton said.
The brand has also shown itself to have the populist touch. In November 2009, the high street chain H&M issued the first 160 people in the queue with wristbands ahead of its opening its doors for the sale of a limited Jimmy Choo collection for H&M to avoid a scrum. But it is well-heeled customers who have largely helped Jimmy Choo grow sales at a compound rate of more than 30 per cent since 2001, boosted by opening stores in cities globally including Dubai, Sydney and Macau.
With a price tag of £500m, the value of Jimmy Choo has also soared. In 2001, Phoenix Equity Partners and Robert Bensoussan paid just £9m for a 51 per cent stake before exiting in 2004 at a price of £101m.
Given the opportunities to grow Jimmy Choo further in emerging markets, such as Russia and China, large private equity firms are likely to mull buying it. But few, if any, brands remain in vogue for decades and fashion is notoriously fickle.
Robert Clark, the senior partner at Retail Knowledge Bank, said: "I have always perceived it to be a brand that will run out of steam on a global basis because fashion moves on, or new celebrities will arrive on the scene wearing something different, and people will be looking for the new Jimmy Choo. But I have been proved consistently wrong."
Luxury brands bounce back as the rich start spending again
The world's biggest luxury brands were buffeted by the global recession but many of them are now flying high.
Take Richemont, the world's second-largest luxury goods group, which this week boasted that its first-half profits would be "significantly" ahead of expectations after sales rocketed by 37 per cent over the five months to 31 August.
The maker of Cartier jewellery and watches (pictured) was buoyed by soaring demand in Asia, also behind the recent strong performances at Burberry, LVMH and Swatch Group. Meanwhile, brands such as Mulberry, the handbag maker, has continued to power ahead largely from UK sales. Corporate activity is also back on the agenda. In May, Richemont bought a majority stake in Net-A-Porter, in a deal that values the online luxury specialist at £350m.
The return to form of luxury groups was further highlighted by L'Occitane, the French cosmetic specialist, completing a listing on the Hong Kong stock exchange in May, in order to fund its expansion in Asia and other emerging markets.
"Global luxury brands are very enduring in their appeal and that has proved to be the case time and time again," said Robert Clark, the senior partner at Retail Knowledge Bank. "I think the return of luxury brands this year is a global phenomenon."
Maureen Hinton, the lead analyst at the retail consultancy Verdict, cited the return of bonuses in the global financial services sector and the fast-growing markets of Brazil, India, China and Russia. "Most luxury brands have got a very strong brand handwriting and they have continued to invest during the downturn in the marketing of those brands," she said. "Most of the money goes in creating the image of the brand."Reuse content