Jimmy Choo likely to float at lower price in London IPO

Jimmy Choo

Luxury shoemaker asking for between 140p and 160p a share, at lower end of its original price range of 140p to 180p

Jimmy Choo is likely to float at a lower price than originally hoped for in London, amid increasingly choppy stock markets around the world.

The luxury shoemaker is asking new investors for between 140p and 160p a share, at the lower end of its original price range of 140p to 180p.

Books are covered across the new range and the company is said to believe it can achieve the revised top-end price of 160p, which would value the shoemaker at roughly £620m.

The maker of shoes worn by Hollywood actors such as Sandra Bullock and Cate Blanchett set out its plans for a London initial public offering in September with hopes the float could value the business at more than £700m.

Jimmy Choo is trying to lure investors with the prospect of Asian expansion for sales of its shoes which, famously worn by Sarah Jessica Parker’s character in Sex and the City, sell for between £300 and £600 a pair.

Since the company announced its intention to float, stock markets have fallen as investors have become worried about the prospects for global economic growth.

The FTSE 100 index has lost almost 7% in the past month as concerns about conflict in the Middle East have been exacerbated by slowing growth in China and Germany as well as the spread of the Ebola virus from West Africa.

A source familiar with the Jimmy Choo flotation said opting for the lower end of the original range had nothing to do with market fears. Instead, the owners were asking for a realistic price that left room for the shares to rise when trading starts, the source said.

IPO fever erupted in the first few months of the year as fund managers queued up to buy shares of new companies that could capitalise on renewed prospects for economic growth. But several flotations left investors out of pocket and they have grown more wary as the international economic backdrop has grown more gloomy.

Fat Face, the leisure clothing brand, abandoned its IPO in May. Miller Homes, a housebuilder, pulled its planned flotation this month, citing market jitters about prospects for the UK property market.

Jimmy Choo’s owner, JAB Luxury, the investment arm of the German billionaire Reimann family, plans to sell 25% of the firm without directing any of the new capital into the business.

Jimmy Choo’s advisers said the brand has strong growth prospects because its shoes are at the luxury end of the market, where customers are less likely to be buffeted by wider economic events.

Founded in the 1990s by Jimmy Choo, a Malaysian bespoke shoemaker, and the British designer Tamara Mellon, the firm went through the hands of several private equity firms before JAB bought the brand for more than £500m in 2011.

Neither Mellon nor Choo are still involved although Choo’s niece Sandra Choi is the brand’s creative director.

Powered by Guardian.co.ukThis article was written by Sean Farrell, for The Guardian on Monday 13th October 2014 16.17 Europe/London

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