Jimmy Choo Swings To Profit In Fiscal ’15 On Asia, Retail Growth

Jimmy Choo Fall 2016 Shoes Collection
Jimmy Choo fall '16 shoe collection.
Courtesy of brand.

Jimmy Choo Plc. swung to profit in the 2015 fiscal year, with net consolidated income totaling 19.4 million pounds, or $29.7 million. In the previous year, the company had recorded a loss of 10.8 million pounds, or $17.8 million.

Sales at Jimmy Choo were up 6 percent to 318 million pounds, or $486.5 million, in the 12 months to Dec. 31 on the back of strong growth in Asia and Japan, new store openings, and expanding wholesale revenues, as reported. At constant currency, sales grew 7 percent.

In 2015, adjusted earnings before interest, taxes, depreciation and amortization rose 1.5 percent to 51 million pounds, or $78 million.

Dollar figures have been calculated at average exchange rates for the periods to which they refer.

CEO Pierre Denis said the profit and revenue growth came from “sustained renovation of the retail portfolio” and said creative director Sandra Choi’s designs were “warmly received,” contributing to the global appeal of the brand.

Peter Harf, chairman of Jimmy Choo, called the external environment in 2015 “challenging and competitive” and that the company had successfully reversed the first half decline in wholesale revenues.

He said it remains on track with growth forecasts in Asia and Japan, where brand awareness continues to grow strongly.

As reported, retail net revenue grew 8 percent, and 9 percent at constant currency rates. Wholesale revenue growth was 1 percent at constant exchange rates and flat in reported terms despite the impact of the conversion of Singapore and Malaysia from wholesale to retail.

The company opened 16 directly operated stores in the 12 months, while 15 stores were renovated with a new concept. The brand currently has a portfolio of more than 140 directly operated stores.

The company said the main driver of growth in 2015 was shoes, which represented 76 percent of net revenue. It said men’s footwear continued to make “excellent” progress, and was the fastest growing category, accounting for around 7 percent of net revenue.

Accessories volumes remained stable, with a trend toward smaller bags, while men’s and women’s fragrances contributed to strong growth in licensing income.

Asia and Japan continued to grow strongly, the company said, while Europe benefited from growth in tourism, which was offset by the loss of Russian tourists, and more recently the impact of recent terrorist events.

Choo said the U.S. business made “good progress” in a market distorted by both foreign exchange fluctuations and competitive pressures.

The company said it was confident going into the new fiscal year and said it would grow faster than the market.

“Our business in Asia, where we are underpenetrated, and Japan is growing well, and we have significant opportunities to maintain this outperformance in the years ahead,” the company said, adding that 2016 will see the implementation of its omni-channel platform in the U.S. and Europe for its retail and online network.