Strong demand among Asian shoppers, particularly in China, has helped Jimmy Choo report a strong first-half despite the tough conditions in the luxury sector.
The top-end footwear and accessories retailer, whose popularity in Asia soared after the airing of a South Korean TV series My Love from The Star in which a Jimmy Choo-soled actress falls in love with an alien, said that its operating profit had leapt 42.6 per cent to £25.3 million.
Jimmy Choo’s adjusted earnings were up nearly 13 per cent at £31.3 million on total revenue that rose by 9.2 per cent to £173.1 million.
Pierre Denis, chief executive of Jimmy Choo, said the group’s performance had been driven by its Asian division but said it had also “managed a repositioning in a difficult USA market”, adding: “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 conditions. This is combined with a strong underlying cash flow conversation leading to further positive steps on deleveraging.”
Jimmy Choo has recently been producing new ranges created by Sandra Choi, its creative designer, and it said that consumer response to the new products had been strong. Alongside its core footwear division it also sells handbags, small leather goods, scarves, sunglasses, belts, and fragrance. It recently expanded into men’s footwear which now accounts for 8 per cent of its revenue.
A pair of Jimmy Choo shoes can cost nearly £3,000 a pair but some are also available at about £250, while its Lockett Petite handbag costs £1,195. Its recently launched Illicit perfume brand is promoted by Kit Harington, who stars in Game of Thrones.
The company was founded in 1996 as an east London cobbler by the shoe designer Jimmy Choo before becoming a worldwide fashion label under the leadership of Tamara Mellon, the Vogue accessories editor. It was sold a number of times before its controlling owner, JAB, the investment vehicle of Germany’s billionaire Reimann family, floated part of the business in 2014.
Mr Denis said that Jimmy Choo could benefit from a prolonged weak pound as only 9.5 per cent of its global revenue and 28 per cent of its operating costs were in sterling: “Hence a weaker ground will lead to a reported upside in business performance at a revenue and profit level.”
The executive added that the group had refinanced its debt in March which had reduced its borrowing costs over the next five years and said: “There is significant scope for long-term growth for the business, particularly in Asia where we remain under penetrated. Jimmy Choo is a global business with significant growth potential”.
Shares in Jimmy Choo rose by 6¼p, or 5.3 per cent, to close at 124p.