Jimmy Choo defies Chinese economy slowdown and enjoys 7 percent FY15 revenue jump

Jimmy Choo has succeeded there were many are finding failure: the famous shoemaker has enjoyed a 7 percent jump in revenues for fiscal year 2015, despite the Chinese economic slowdown.

As explained by the company in a call with analysts held Thursday, they have been able to defy the challenging conditions in Asia thanks to a surge of the demand of its handbags and men’s footwear, which has helped sales jump 7 percent. In fact, its men’s division made “excellent progress” and remained one of its fastest-growing categories in 2015, the firm said.

The company also commented on a trend for smaller bags, as its accessories revenue remained stable.

Strong performance in Asia offsets Jimmy Choo’s weaker sales in Europe

Geographically, Jimmy Choo noted a strong performance in Asia and Japan, offsetting the impact in Europe of terror attacks.

"We remain confident in our ability to grow faster than the market. Our business in Asia (where we are under-penetrated) and Japan is growing well, and we have significant opportunities to maintain this out performance in the years ahead," said the company’s chairman, Peter Harf.

Harf added that “The company successfully reversed the first-half decline in wholesale revenues and is on track with growth forecasts in Asia and Japan where brand awareness continues to grow strongly.”

In Europe, Jimmy Choo benefited from rising tourist numbers, but highlighted the loss of Russian visitors at its European stores amid the country’s economic malaise, and the impact of the Paris terror attacks. Its US business made “good progress” despite volatile exchange rates and competition.

Revenues from licensing doubles on a constant currency basis

Full year revenues for 2015 rose seven percent to 318 million pounds, from 300 million pounds on a constant currency basis. Taking into account currency changes, the rate of growth was six percent, noted the retailer.

Wholesale revenues came in at 100 million pounds. Revenues from licensing increased 50 percent on a constant currency basis, to 10 million pounds.

Retail sales accounted for 208 million pounds of total 2015 revenue, experiencing a notable 9 percent year-on-year increase. Shoe sales, accounted for 76 percent of net revenues.

Revenue was also boosted by the opening of 16 stores, bringing the total to 141. Plans for 2016 include up to another 15 more stores.

The City welcomed the update and shares climbed 1.2 pence to 128.5 pence.

Analyst Piral Dadhania from RBC Capital Markets said in a note to investors that it was encouraging against “a tough sector backdrop”.





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