Jimmy Choo IPO could value luxury shoe maker at $1.1 billion

Shoe retailer Jimmy Choo could float on the London Stock Exchange at a valuation of $1.1 billion.

Jimmy Choo is one of the world’s most recognisable fashion brands, with fans around the world who clamour for its most high-end shoe designs. When it hits the stock market next week, it is hoping that investors will be every bit as excited.

The company is planning its initial public offering (IPO) to take place on the London Stock Exchange, with share pricing expected to happen on 17 October and the first day of trading scheduled for 20 October.

What’s more, the valuations involved are impressive: it could be valued at up to $1.1 billion (£702 million). With a quarter of the business expected to be sold off, that could mean raising anything from £136 million to £175 million, depending on where they are priced in the initial range of 140-180 pence per share.

That valuation is down from previous estimates – it had been suggested the company could raise as much as £1 billion – but remains very healthy indeed, especially since the firm has relatively little presence in high-growth markets across Asia. Other luxury fashion brands such as Burberry are way ahead in that respect and can use that potential to woo investors.

However, it’s possible that this untapped potential could actually serve to attract would-be shareholders. The opportunities for growth across Asia, especially for a high-end fashion brand made famous by TV shows such as Sex and the City, could well encourage investors to pour cash into the firm to finance growth.

Jimmy Choo already has 11 shops in China and is planning to open another five per year up to a total of around 30.

With 120 directly operated shops already open at the end of June, it is still planning to open another 10-15 each year until 2016. If anything, the biggest risk may be that, if there are too many shops and the brand becomes more accessible, it might lose some of its luxury status.

There is also some concern about its balance sheet – Andrea Gerst, who helps to manage the Julius Baer Luxury Goods Funds, told Reuters that Jimmy Choo has a high level of capital expenditure. Perhaps its investment in the growth of its retail offering is unhelpful in that respect. But either way, it’s clear that one of the fashion world’s best-known brands still has lots of growth ahead.