Jimmy Choo upbeat as new stores, e-tail, Lockett bag and men's sales grow
Luxury footwear and accessories label Jimmy Choo was upbeat on Thursday as it revealed another year of record revenue in 2016. Revamped stores, online expansion, licensing growth and a positive response to its men’s product (plus a men’s eyewear launch planned for 2018) all made it understandably confident, despite tough times for luxury last year.
The 12 months to December 31 saw strong growth in Asia, continued solid growth in Europe and Japan, and “improving trends” in US retail, although this was offset by its “planned reduction in US wholesale”.
The weak pound helped too. Its revenue rose a healthy 15% to £346m, although at stable currency exchange rates, it was up only 2%. However, for a (relatively) small company operating in the face of a luxury segment downturn, 2% is not a figure to sniffed at.
The firm said that retail revenue grew 17% to £244m (4% at constant currency) as a stronger final quarter resulted in second half comparable sales improving to 2%. The start of the year had been challenging but that late boost meant an overall comps result for the year of -1%.
That 1% dip reflected the impact both of its store renovation programme and downward adjustments to maintain its global price positioning. But the business saw a much improved trend throughout the second half and online continued to grow, now accounting for 6% of revenue.
Wholesale turnover grew 8% to £107m (although it was down 4% at constant currency) with the planned reduced purchasing by US department stores offset by growth across all other regions. Like many luxury labels, Jimmy Choo is controlling its supply of product to discount-obsessed US department stores very carefully, preferring to rely on its own stores and its online channel for growth.
And licensing revenue rose 25% (or 9% constant currency) to £13m as products like perfumes performed well.
The company is investing in its own stores with the directly-operated store count rising by nine in 2016 and 16 of its stores having been revamped for its new concept. That means over 45% of the store portfolio has now been upgraded.
The firm said that in its 20th anniversary year, the main growth driver remained shoes, which represented 75% of revenue. But accessories benefitted from the continued development of its Lockett group of bags.
But as the figures show, 2016 also saw further strong growth in the licensing business, and Jimmy Choo made continued progress in the men's (including both shoes and accessories).
Men’s remains its fastest growing category and now accounts for around 9% of revenue. During the year it extended its Safilo licence until 2023 and has scheduled the launch of men's sunglasses and eyewear for 2018.
The result of all this is that Jimmy Choo expects to deliver underlying profits in line with expectations for 2016. And for 2017, it is seeing improving trends across all regions and is “well positioned to take advantage of a stronger marketplace.”
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