Jimmy Choo Registers a Good Second Half

Jimmy Choo has reported an increase in its 2015 revenues. The company was able to reverse the wholesale sales decline experienced in the first half of the year.

Leeson. 04/02/2016

The luxury shoe maker has reported annual revenues of 318 million pounds (€420 million), representing an increase of 6% over the same period (disregarding the currency effect the increase was 7%). These accounts are particularly striking because multi-channel sales fell in the first half, which means that in the second half of the year it has been able to offset that decline, reaching a similar figure last year. In particular, sales in this channel totaled 100 million pounds, while retail sales in its stores exceeded 200 million pounds, with a healthy increase of 8%.

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Jimmy Choo Spring-Summer 2016 – Mina Flat Boots. Click to buy

Looking at the comparable sales, which are those that take place in shops that have been opened for at least a year, rose 1%. So the main responsible for increasing sales are the opening of new stores in the year, 16 according to the company. That brings to 140 the number of stores that Jimmy Choo has worldwide.

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Jimmy Choo Spring-Summer 2016 – Sunglasses. Click to buy

Geographically, the best development for Jimmy Choo came from Asia, especially Japan. In Europe, the business has benefited from increased tourism, especially from the US, but on the other hand it has been penalized by the decline in traffic from Russia. By businesses, footwear is responsible for three quarters of total revenue. However, it also should be noted that diversification initiated by the group a few years ago is bearing fruits. Accessories, perfumes and optical account by a 25% of the global revenues. Also, the male line is growing and already represents 7% of total sales.

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Jimmy Choo Spring-Summer 2016 – Taytum. Click to buy

Jimmy Choo stocks on the LSE have reacted well to the announcement. It has come up 2% after the statement was published, but it´s still losing 25% in the last twelve months and 30% from their record highs of last August. As has happened with the rest of the industry, forecasts on the slower global growth (and China) will negatively weighted on the luxury industry sales, causing some investors selling some sector stocks. Anyway, according to analyst estimates, the target value is 156 pence, which would give a potential upward of 20%.

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