Fashion trends are not the only thing that change in the fashion world. The brands also keep merging and evolving from time to time.
A great buzz was created in the fashion world when Michael Kors, the U.S. retailer, announced that it will buy Jimmy Choo, the luxury shoemaker. The American retailer acquired the British brand, which became famous because of its celebrity patrons like Princess Diana, for $1.2 billion.
Michael Kors is known as the upmarket maker of shoes and handbags. Though the announcement of the takeover was made months back, on Thursday the retailer confirmed that it has arranged for the funds.
Three of the major rating agencies of the US; Moody’s, S&P Global and Fitch have given the lowest investment grade ratings. Until now, Michael Kors was catering to lower and middle-end of the luxury goods market. Jimmy Choo caters to the higher end of the spectrum and thus with this acquisition, Michael Kors got just what it was looking for.
The demand for Michael Kors products was dwindling because of which it had to shut down few of its stores. But with Jimmy Choo now in its kitty, it is going to start ruling the circuit again. The investors are also going gaga over the company. This was evident from the company’s debut $450m bond sale. There were orders of more than $4bn for this debut as per portfolio managers of JPMorgan and Goldman Sachs, who are following this deal. This has given an opportunity to Michael Kors to tighten the borrowing terms.
In today’s globalized world, the fashion industry is also moving fast towards collaboration so that it can both survive as well as flourish.