PRINT THIS PAGE

Hicks Muse Europe acquires major share of Jimmy Choo

The European arm of US buy-out group Hicks Muse has acquired a majority share in glamour shoe designer Jimmy Choo in a deal that values the company at £101m. The purchase provides an exit for its previous private equity backer Phoenix Equity Partners.

Lyndon Lea, the leading figure for Hicks Muse in Europe, said: 'Jimmy Choo is a super iconic brand in the luxury goods market. We are excited to work in partnership with Robert (Bensoussan) and Tamara (Mellon) and their exceptional team to continue to support the dynamic growth of the Jimmy Choo brand.'

Jimmy Choo opened its first store in London in 1997. It has since opened 23 stores in New York, Beverly Hills and Las Vegas and beyond as well as extending its product range into handbags and other leather goods. Annual sales are around £40m.

Phoenix Equity Partners backed Robert Bensoussan in acquiring 51 per cent of the business in 2001. It is understood to have generated a return of nearly four times its original investment with this sale.

The deal may turn out to be more remarkable for the speed with which it was completed than the glitziness of the asset. Hicks Muse moved from exclusivity to signing in less than a week, much faster than is typically the case with private equity transactions.

Phil Sanderson, the private equity partner at law firm Travers Smith who worked on the deal for Phoenix, said the unusual speed of the transaction was partly the result of it being a secondary asset. But he said it also reflected a willingness and determination on the part of the buyer at a time when the competitiveness of the market required interested parties to show clear differentiation.

'At a time when everyone wants an angle, private equity firms are having to gear themselves to act quickly and this deal is a very good example of that phenomenon,' Sanderson said. He predicted speed of delivery could become an ever more critical capability for private equity firms.

Hicks Muse has had some success in the luxury goods sector in Europe. It bought the Mumm and Perrier Jouet champagne houses in 1999 and sold them two years later for around four times its investment. It is currently raising its second dedicated European fund with a target of around $2bn.

Copyright © 2004 AltAssets