Flamboyant fashion company Michael Kors to buy Jimmy Choo for 896 million pounds

On Tuesday, the flamboyant fashion company, Michael Kors agreed to buy the high fashion house, Jimmy Choo for 896 million pounds. Michael Kors faced a nosedive sales and much more upscale brands sales declined sharply.

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Michael Kors is “trying to shore up declining demand for expensive handbags,” NPR’s Yuki Noguchi said:

“The main product that built the Michael Kors fashion empire is handbags. But intense price competition and declining demand has cut into that luxury market. The Kors brand helped further that trend by selling a good portion of its wares in department stores, which heavily discounted prices, making it difficult to get customers to buy their products at full price. By buying the Jimmy Choo brand, the company is hoping to capitalize on increasing sales for high-end shoes.”

Michael Kors said in May that “sales at stores established for more than a year fell 14 percent in its fiscal fourth quarter,” according to the reports. Jimmy Choo announced that it was up for sale in April they said “After its majority-owner JAB, the investment vehicle of Germany’s billionaire Reimann family, signaled its intention to focus on consumer goods instead.”

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