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Jimmy Choo revenues rise 3.8 percent in H1

By Prachi Singh

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Business

For the six months ended 30 June 2016, overall revenue at Jimmy Choo increased by 3.8 percent on a constant currency basis and 9.2 percent on a reported basis, with continued growth across all segments. Retail revenue grew by 2.1percent on a constant currency basis to 107.3 million pounds (141.8 million dollars). Reported revenue was 7.6 percent ahead of last year. Adjusted EBITDA grew by 12.8 percent compared to the prior year, with adjusted EBITDA margin increasing to 18.1 percent.

“These results represent an excellent performance in the period, with growth and margin expansion leading to improved earnings, further enhancing the brand’s track record of delivery in all market 2 conditions. This is combined with strong underlying cash flow conversion leading to further positive steps on deleveraging. We have made a good start to the second half and we remain optimistic about our prospects both for this year and for our performance in the future,” said Pierre Denis, CEO of Jimmy Choo.

Review of the first half trading

The company saw good performance in its New Concept stores, offset by strong comparatives and disruption from store development programme. The company renovated or relocated nine stores during the period, bringing the total stores trading in the New Store Concept at the period end to some 40 percent of the DOS estate, including its five flagships.

Online business, at 6 percent of revenue, continued to develop well during the period, with omnichannel services scheduled for a progressive roll out in the UK and USA from the second half. Wholesale business grew by 5.6 percent on a constant currency basis and 10.6 percent on a reported basis despite the expected reduced purchasing by USA department stores in the face of weaker footfall in the USA generally.

In H1 2016, China and Hong Kong both recorded growth and Jimmy Choo expanded in other territories in the region through the opening of franchise doors, including travel retail. In total it opened two DOS and six franchise doors in Asia ex-Japan in the period and experienced double digit LFL growth in mainland China. The company saw further growth in Japan.

The company has repositioned its business in the Americas, with USA wholesale revenue accounting for only 10 percent of global revenue. This coincided with the expected reduced purchasing by department stores. Elsewhere there has been softer luxury demand in the USA generally, compounded by a drop in sales to international tourists. During the period, the company relocated its Madison Avenue flagship and Chicago DOS and the opening of a new store in Soho on Greene Street, bolstering our powerful North American platform.

In EMEA, the company saw growth in the UK, and experienced domestic demand growth across EMEA generally, offset in part by weaker sales to international clients.

Continues planned global retail expansion

The company continues to roll out its New Store Concept across the store portfolio, with six new DOS and nine renovations and relocations in the first half. This brings the total number of DOS to 147. Jimmy Choo expects to open 10-15 new DOS each year, towards its medium term target of 200 DOS, and to renovate a further 10-15 DOS each year.

Its global footprint of ten planned flagship stores is designed to be a fuller expression of the Jimmy Choo brand in key locations around the world. Those in New Bond Street, Sloane Street, Beverly Hills and Harbour City Hong Kong are already open. Further flagship stores are planned in Milan, Paris, Tokyo, Shanghai and Beijing with the programme expected to be completed during 2017. During the period, the company opened ten franchise doors in Kazakhstan, Qatar, Chile, Japan, Macau, South Korea and Australia, including seven travel retail doors. Jimmy Choo says, this acts as a strong base for its franchise ambitions as well as potential joint ventures in Korea and the Middle East.

Other developments in the first half

The company continued to experience strong growth in licence income with its partners Safilo and InterParfums for sunglasses & eyewear and fragrance respectively, leading to constant currency growth of 18.2 percent in this segment. The company has extended our Safilo licence until 2023 and has scheduled the launch of men’s sunglasses & eyewear for 2018.

On June 15, 2016, Gianluca Brozzetti stepped down from the board of the company in order to dedicate more time to his executive assignments. Meribeth Parker replaces Gianluca Brozzetti on the Remuneration Committee and is also joined by Anna-Lena Kamenetzky.

Picture:Jimmy Choo

Jimmy Choo