(Reuters) – Jimmy Choo set out plans on Tuesday to join the London Stock Exchange next month in a deal that could value the upmarket shoe maker at more than 700 million pounds ($1.2 billion), seeking to woo investors with the prospect of expansion in Asia.
Its owner JAB Luxury, the investment arm of the billionaire German Reimann family, plans to sell at least 25 percent of the company in the listing.
Jimmy Choo will market itself as a chance to gain exposure to the upper end of the shoe market, one of the fastest growing areas in the luxury goods industry.
Its flotation, however, comes at a challenging moment, with slowing growth in the industry overall and investor worries about conflicts in Ukraine and the Middle East which could affect future sales and expansion plans.
The brand, famous for its rock chic style and perilously high heels, is seeking to grow its business by opening new stores in Asia and elsewhere, although no new funds will be raised for the company itself in the share sale.
Its shoes, costing 300-600 pounds, have featured in TV shows and films including “Sex and the City” and “The Devil Wears Prada”. Exposure in the Korean show “Love from the Star” boosted the sales of an anthracite lamé glitter pointy toes pump model called Abel.
Founded in the 1990s by Malaysian bespoke shoe maker Jimmy Choo, the company has gone through the hands of several private equity firms before being acquired for more than 500 million pounds in 2011 by JAB.
Jimmy Choo had 120 directly operated stores as of the end of June and plans to open 10-15 shops a year until 2016. Around five of these will be in China where it seeks to ultimately increase its number of stores to 30 from 11 today.
Comparatively, rival luxury shoe maker Christian Louboutin, famous for its carmine red soles, has 92 boutiques worldwide of which 13 are in mainland China.
“There are opportunities for specialist shoe brands to come into the Chinese market,” Jimmy Choo Chief Executive Pierre Denis told reporters on Tuesday.
“We feel very strongly that there is no reason why one day the Chinese client will not want to have shoes coming from a specialist company.”
Analysts expect Jimmy Choo will aim to be priced in line with sector peer Salvatore Ferragamo of Italy (SFER.MI: Quote, Profile, Research) which is currently trading on about 12 times next year’s core earnings and has a market valuation of 3.75 billion euros (2.95 billion pounds).
The luxury goods industry is trading on average on about 10 times next year’s core profits.
Jimmy Choo made adjusted core profits (EBITDA) of 46.9 million pounds on revenue of 281.5 million pounds in 2013. In the first half of this year, revenue reached 150.2 million pounds with EBITDA of 27.6 million pounds.
The company said overall sales growth in the first half was 9.4 percent, with a like-for-like increase of 2.2 percent which was impacted by store renovations and roll-out of a new format.
Jimmy Choo last week opened its biggest store ever in New Bond Street in London designed by the David Collins studio after opening its first flagship in Beverly Hills in May.
Denis said the brand’s biggest market was the United States, followed by Japan, the country where it had the biggest presence in Asia and where sales rose by more than 20 percent in the past two years.
European IPO issuance levels have quadrupled so far this year from 2013, with 177 companies raising $55.5 billion. London has proved a particularly attractive destination, accounting for $19.8 billion, or just over a third of issuance, according to Thomson Reuters data.
BoA Merrill Lynch (BAC.N: Quote, Profile, Research) is leading the deal. HSBC [HSBA.L] is acting as joint bookrunner and BHF-BANK [DBKGHF.UL] acting as co-lead manager.