Jimmy Choo cashes in on sterling fall as profit and revenue grow

This article titled “Jimmy Choo cashes in on sterling fall as profit and revenue grow” was written by Julia Kollewe, for theguardian.com on Thursday 25th August 2016 10.40 UTC

The drop in sterling since the EU referendum has been a boon to Jimmy Choo, which is pushing ahead with store openings around the world.

As the luxury shoe and bag retailer celebrates its 20th anniversary, Peter Harf, the chairman, said Jimmy Choo’s prospects had “never looked better”. The company reported revenue growth of 9.2% for the first six months of the year, or 3.8% at constant currencies, and a 42.6% increase in operating profits to £25.3m. The second half had started well, the retailer said, with a positive benefit from a weaker pound.

Jimmy Choo has 147 stores worldwide, including 10 in the UK, and is opening about 10 stores a year. It said only 9.5% of revenues were generated in sterling, while 28% of operating costs were denominated in sterling, “hence a weaker pound will lead to a reported upside in business performance at a revenue and profit level”.

While Jimmy Choo is known for its killer heels, made famous by the Sex and the City character Carrie Bradshaw, men’s footwear, including its Grove loafers, has become the retailer’s fastest-growing category. It now accounts for 8% of revenues, which is expected to rise “well into double digits”. The company has 71 joint men’s and women’s stores globally.

The retailer continues to expand in China, where its presence lags behind rivals, and enjoyed strong like-for-like growth in the first half of the year, while also recording growth in Hong Kong. Revenues rose by 22% in Japan. Other luxury goods retailers, such as Burberry, have been more dramatically affected by Chinese tourists cutting back on luxury spending.

Tourist spending on luxury items has declined in Europe since the end of 2015, following a spate of terrorist attacks, Jimmy Choo said. Revenues grew in the UK, however, where all its stores have been refurbished.

The company was founded in 1996 by the shoe designer Jimmy Choo and the then Vogue accessories editor Tamara Mellon.

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