Jimmy Choo Asia sales soar
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Jimmy Choo Asia sales soared 19.2 per cent last year, according to its annual results.
The solid performance reflects considerable investment in the Asian market – and was enough to mitigate a worrying 3.9 per cent in wholesale sales in the US.
“While other luxury players such as Gucci and Louis Vuitton have struggled due to the demand for luxury goods falling in (Asia), Jimmy Choo’s strong British heritage has struck a chord with consumers,” observes Fiona Paton, a retail analyst with GlobalData Retail.
Jimmy Choo CEO Pierre Denis says the brand “remains underpenetrated” in Asia and the company will continue to pursue new distribution opportunities there.
For the year to December, Jimmy Choo’s global revenue grew at 1.6 per cent in constant currency and by 14.5 per cent in reported currency – up from £317.9 million in 2015 to £364 million last year.
“On the surface these are an impressive set of results for Jimmy Choo with retail revenues climbing to £243.9 million and operating profits soaring 42.6 per cent,” says Paton.
“However, the retailer’s reported high revenues were largely a result of currency changes during the year, which caused both sales values gains and changes to shopping patterns, as tourists favoured buying luxury items in the UK.”
A foray into menswear boosted sales and broadened brand appeal during the year.
“The move into men’s accessories and footwear comes as men show more interest in style and fashion, while its range of luxury trainers has helped leverage the lucrative athleisure trend,” says Paton.
“On the surface these are an impressive set of results for Jimmy Choo with retail revenues climbing to £243.9 million and operating profits soaring 42.6 per cent,”
“The retailer reported both developments have been successful, especially men’s footwear and accessories which is now its fastest-growing category representing 9 per cent of all sales.”
But she said Jimmy Choo’s greatest concern moving forward had to the the American market.
“The fall in footfall to department stores’ luxury concessions caused total wholesale revenue to decline 3.9 per cent. Globally, the retailer opened 10 new format stores, but in the US the retailer relocated its New York flagship from Madison Avenue to SoHo and closed one of its new format stores. Jimmy Choo will need to develop more innovative marketing to ensure the brand still has the appeal it once did in a tougher US market.”
With global like-for-like sales down 0.8 per cent, Jimmy Choo will be banking on Asian sales to continue to drive growth. Paton says the brand also needs to do more to boost its brand appeal.
“Competitors like Burberry have invested in personalised marketing campaigns and teamed up with high-profile stars such as Sienna Miller to create feature-film style content. Jimmy Choo should look to create more creative campaigns and hire a well-known brand ambassador to gain more relevance and excitement.”
Last year, the brand opened 16 new company-owned stores, taking its network to 150 worldwide, accounting for 45 per cent of revenues. Online sales account for a further 6 per cent.
Questions & Answers
Q.What is Jimmy Choo's strategy for addressing the decline in US wholesale sales?
What is Jimmy Choo's strategy for addressing the decline in US wholesale sales?
The retailer relocated its New York flagship and closed one new format store in the US. Jimmy Choo needs to develop more innovative marketing to ensure the brand's appeal in a tougher US market, especially with falling footfall in department store luxury concessions.
Q.How did currency fluctuations impact Jimmy Choo's financial performance last year?
How did currency fluctuations impact Jimmy Choo's financial performance last year?
Reported high revenues were largely a result of currency changes. These changes caused both sales value gains and shifts in shopping patterns, leading tourists to favour buying luxury items in the UK.
Q.What specifically contributed to the success of Jimmy Choo's menswear division?
What specifically contributed to the success of Jimmy Choo's menswear division?
The move into men's accessories and footwear capitalised on increasing male interest in style and fashion. Its range of luxury trainers also helped use the lucrative athleisure trend, making it the fastest-growing category.
Q.Why does Fiona Paton believe Jimmy Choo needs to enhance its brand appeal?
Why does Fiona Paton believe Jimmy Choo needs to enhance its brand appeal?
Paton suggests that competitors have invested in personalised marketing campaigns and high-profile stars. She recommends Jimmy Choo create more creative campaigns and hire a well-known brand ambassador to gain more relevance and excitement.
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