U.S. retailer Michael Kors agrees to buy luxury shoemaker Jimmy Choo for $1.2 billion, snapping up a British brand launched in the east end of London and made famous by celebrity fans including Princess Diana. Scarlett Cvitanovich reports.
Michael Kors Holdings Ltd. agreed to buy Jimmy Choo Plc for about 896 million pounds ($1.2 billion), clinching the London-based maker of strappy stilettos, handbags and perfume.The handbag maker will pay 230 pence a share for the luxury shoemaker, a premium of 18 percent over Monday’s close, the companies said Tuesday. The price is equal to about 17.5 times Jimmy Choo’s adjusted Ebitda for 2016.
The Jimmy Choo brand rose to prominence in the late 1990s, boosted by high-profile devotees including the late Princess Diana and the fictional Carrie Bradshaw in television series “Sex and the City.” The deal comes amid consolidation in the luxury industry, with Michael Kors rival Coach Inc. agreeing to buy Kate Spade & Co. earlier this year.
Jimmy Choo was acquired by private-equity investors three times before being bought by JAB Holding Co. for more than 500 million pounds in 2011. JAB, the investment vehicle of the billionaire Reimann family, sold a stake in a 2014 initial public offering, though has remained the company’s majority owner with a 68 percent stake. The shares rose as much as 17 percent in early trading. BofA Merrill Lynch and Citigroup advised Jimmy Choo. Goldman Sachs and JPMorgan Chase & Co. advised Michael Kors. Michael Kors said it would keep Jimmy Choo’s existing management team, led by Chief Executive Officer Pierre Denis.
Michael Kors, once the hottest name in affordable luxury, has been struggling in recent quarters with declining same-store sales as fewer people visit its shops.
It has been expanding into dresses and menswear and investing in its online business. The company said in May that sales at stores established for more than a year fell 14 percent in its fiscal fourth quarter. 'We like the target given its solid financial footing, premium luxury positioning, and footwear leadership,' Jefferies analysts wrote in a broker note. In a statement, Michael Kors said Jimmy Choo is the 'ideal partner'. It said: 'The boards of directors of Michael Kors Holdings Limited and Jimmy Choo plc are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition.'
Jimmy Choo first floated on the London Stock Exchange in 2014.
The statement continued: 'Michael Kors believes it is the ideal partner for Jimmy Choo and is well positioned to support Jimmy Choo's continued growth. 'Michael Kors intends to apply the experiences, infrastructure and capabilities that it has developed as a company over the course of its own worldwide growth as a luxury fashion brand to support the growth of Jimmy Choo.' The move to buy the shoe company comes two months after rival handbag maker Coach struck a deal to buy quirky fashion brand Kate Spade & Co, as so-called affordable luxury companies look at new markets and customer bases to boost flagging sales. The US retailer has secured the backing of Luxembourg-based investment firm and majority shareholder JAB Luxury, the investment vehicle of Germany's billionaire Reimann family, which holds 67.66 percent of Jimmy Choo. The London-listed group will retain its current management team, including chief executive Pierre Denis. 'We believe that Jimmy Choo is poised for meaningful growth in the future and we are committed to supporting the strong brand equity that Jimmy Choo has built over the last 20 years,' said John Idol, chairman and chief executive of Michael Kors.
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On a spring afternoon, Albert, a high school senior, sits in a waiting area with his parents at a dim sum restaurant in New York. It's an unusually slow Saturday--the wait is only two and a half hours, much less than a week ago, when the restaurant stopped taking the names of hopeful diners by just 1 p.m. "My colleague in Hong Kong told me how popular it was, so we decided to check it out," says his father.
Hong Kong-based Tim Ho Wan opened in lower Manhattan in December. Since then the demand has overwhelmed the 60 tables, thanks to headlines dubbing it "the world's cheapest Michelin-starred restaurant." This location doesn't have a Michelin star, though two of Tim Ho Wan's 45 restaurants--both in Hong Kong--do. And those two no longer serve the cheapest Michelin-starred meals--two hawker stalls in Singapore took that title last July, the first time the French ratings guide awarded a coveted star to a food stand.
Still, its most expensive dish in Hong Kong is priced at only $3.75, quite a feat for any Michelin restaurant. And the crowds keep coming for the popular Cantonese cuisine featuring bite-size treats served on small plates and baskets. Its star makes it an outlier on a list that's dominated by expensive restaurants in fashionable neighborhoods. Says Michelin of the Sham Shui Po location: "...don't be surprised to find a queue of expectant diners outside here, too. The 25 different dim sum choices are reasonably priced and carefully prepared."
The New York outpost marks Tim Ho Wan's first foray into the West. It's already made a name for itself in Asia-Pacific, with outlets in Macau, Taiwan, Singapore, Malaysia, Vietnam, the Philippines, Indonesia, Thailand and Australia. The chain reflects the personalities of the two cofounders, who certainly aren't the kind of flamboyant, high-profile chefs often associated with Michelin restaurants. Mak Kwai Pui, 54, is a self-effacing man of few words. During a video interview on his phone, as if unused to and amazed by the technology, he occasionally titters as his face moves into and out of view. He traces his journey back to age 15, when he and his family moved to Hong Kong from China and he began toiling in the kitchen learning the art of dim sum cooking. "My dad and uncle were both chefs, and they brought me into the industry," he says, speaking in Cantonese through an interpreter. "I've never tried any other cuisine. Only dim sum." Mak eventually ascended to a job as a chef at the Michelin three-starred Lung King Heen restaurant in the city's Four Seasons Hotel, spending four years there before taking the leap to starting his first business at 46.
He and fellow chef Leung Fai Keung, 53, who appears even more reticent than Mak, took a mere $13,000 and opened their first location in Kowloon's bustling Mongkok district in 2009, aiming to offer quality dim sum at competitive prices. "Back then we didn't think we were taking much of a risk. It was really cheap! Because we didn't have much money at the time, we picked up appliances, machinery, an air-conditioner and furniture from restaurants and businesses that went out of business," recalls Mak. They called it Tim Ho Wan, meaning "to add good luck."
The following year their hole-in-the-wall outlet of just 20 seats earned its first Michelin star. "We were just doing our old job, something that we are good at," says Leung. "There's no superstar entrepreneur--we were just doing what we usually do."
There's no longer a Tim Ho Wan in Mongkok, but the chain has expanded to five locations around the city, all company-owned. Their annual sales total nearly $20 million, with an estimated profit margin of 10%. On top of that the Tim Ho Wan Group collects fees by franchising the other 40 restaurants through ten partners in ten countries. Mak and Leung each own 50% of the company. "We actually never thought about overseas, but there were [partners] overseas who liked our business operations and wanted to run Tim Ho Wan," says Mak. "We had no special technique to attract them."
Rikki Dee, a restaurateur who owns seven Tim Ho Wans in the Philippines, first visited the Mongkok location in 2010. Seeing the people willing to wait in line for a cuisine so prevalent in Hong Kong, he was intrigued by the idea of bringing the concept back home. "There is a Chinese population in the Philippines," he says. "[And dim sum] is very familiar to the Filipino people. The price point was also correct. We are a Third World country and really price-sensitive, so we wanted to bring in something that was more accessible." He's been in the food business for 25 years and runs 138 restaurants in the country under his FooDee Global Concepts.
Dee saw daily walk-ins of around 1,400 people after he opened the first one in 2013. It was the first branch of a Michelin-rated restaurant in the Philippines, and at one point it generated the highest revenue per square meter of any restaurant in the country, he claims. The crowd has now thinned to a weekend average of 800 customers a day.
Altogether, he says, his Tim Ho Wan franchises rake in more than $10 million in annual sales with a profit margin of 10% to 15%. So far, they've sold 5 million of the chain's famous pork buns. In addition to a one-time opening fee per location, he says, the startup cost for one of his larger restaurants has been roughly $700,000 and includes construction, equipment, rent and training. Mak, who persistently refers to his chain as a "quality franchise," requires all Tim Ho Wan head chefs to have previous dim sum experience and then go through a four-week training session in Hong Kong. The seemingly obvious place to conquer is one that the chain has yet to enter. Mak says the Tim Ho Wan name has already been registered in mainland China by someone else, the only reason he cites for not opening there yet. "Maybe in the future we will figure out a way or create another line," he adds. True to form, Mak and Leung move with meekness and restraint for what lies ahead. "We don't have any big plans--we just want to stay grounded and take it step by step," says Mak. "We treat it like a skill business, not a big corporation, and won't expand it like a big corporation. We just want to be stable and make sure our foundation is strong." Source: Forbes
Curiosity is a quality that has always helped in his leadership of one of Asia's biggest cosmetics companies, according to South Korean billionaire Suh Kyung-Bae.
That quality eventually led him to develop three habits through the years that he says are behind much of his entrepreneurial success, Suh told CNBC. Suh is the chairman and chief executive of South Korean beauty company Amorepacific, and the second-wealthiest man in South Korea. Forbes values his worth at $8.4 billion.
Amorepacific is the largest beauty company in South Korea and the seventh-largest cosmetics manufacturer in the world, according to Women's Wear Daily. The company counts popular South Korean brands like Sulwhasoo, Laneige and Innisfree as part of its portfolio.
The first of Suh's three habits involves picking up a book whenever he can. The billionaire said reading is like a vicious cycle that continuously encourages him to expand his horizons.
It's also a habit he shares with other billionaires — such as Warren Buffett and Bill Gates.
"Reading allows me to acquire new knowledge that I previously did not know, and this motivates me to learn more," Suh explained. How Amorepacific broke into China Another easy habit Suh adopted is spending some time at the end of each day in reflection of the time that had just passed. "(I) spend five minutes reflecting before going to bed. (I think about) what I did during the day and how productive I had been," Suh said. Research shows that employees who spend time reflecting on their performance during the day perform 23 percent better compared to peers who did not, according to the Harvard Business Review. The last habit Suh advocated for is staying inquisitive and asking questions. "By asking questions, you know what you're doing well, and where you can improve," he added.
As for aspiring entrepreneurs looking to build global businesses, Suh advised being curious about people and their cultures in different markets — and staying respectful.
Source: CNBC
In terms of their perception of the major brands, however, respondents had similar positive-enough feelings about Coach, Kate Spade, and Michael Kors alike. That might come as a bit of a surprise to investors, since Wall Street has basically been down on every brand but Coach’s. Meanwhile, they’ve been hoping to see Kors and Kate improve.
Why Binetti Likes The Deal
Binetti (UBS, Wall Street Analyst) believes Coach is the best acquirer for Kate Spade after going through a very similar, and even more extreme, turnaround with its brand. He also believes the deal price of $2.4 billion is very favorable, and conservatively, it should add about $50 million cost synergies; this should increase EPS accretion. Further, he sees Kate Spade’s total corporate costs being covered by this cost synergy. A UBS contact also told Binetti that Coach should also be able to manufacture Kate Spade's current handbags for a larger gross margin. In his upside case, where Coach can reduce the corporate cut and increase margins, he sees $0.41 of total accretion (up from $0.32 in the base case).
Finally, Binetti sees two potentially large opportunities for Coach:
Coach Inc (NYSE: COH)'s $2.4 billion acquisition of rival handbag and apparel maker Kate Spade (NYSE: KATE) is finalized, but begs the question: what impact will this have on Coach's stock?
What You Need To KnowOne of the most important factors to consider is Kate Spade's very low store count in North America of 108 full-price units and 68 outlet stores versus Coach's 223 full-price units and 172 outlets, UBS' Michael Binetti noted in a research report. As such, Coach has some opportunity to add Kate Spade stores, especially in areas where Coach has already closed some of its full-price stores.
Meanwhile, 61 percent of women who haven't purchased a Kate Spade item still hold a favorable view of the brand which is greater than 56 percent for Coach, the analyst added. Kate Spade is also more favorably viewed among various demographic groups, including millennials and wealthy consumers which bodes well for Coach's plan to reduce brand-dilutive Kate Spade sales to "shore up pricing power."
The Math Behind The Deal
Based on the analyst's calculations, the acquisition of Kate Spade could be at least 32 cents per share accretive to Coach's fiscal 2020 earnings based on a conservative assumption of $50 million in cost synergies. Coach can even manufacturer Kate Spade's handbags which can generate a three to four basis point improvement versus Kate Spade's current operations which can add another 9-12 cents per share to Binetti's calculations. As such, the analyst's $55 price target on Coach's stock is based on an 18x multiple on his fiscal 2019 earnings per share estimate of $2.77 plus 32 cents per share in accretion. Perhaps more important, since the acquisition was announced, the Street didn't move their consensus estimates on Coach higher at all which implies the merger will generate further upside versus current expectations.
The Blockchain is evidently the crafty invention- an innovation by a person or a group known by the alias, Satoshi Nakamoto. But now, it has emerged into something huge, and the most asked query is “What exactly is Blockchain?”
So as to answer this, blockchain technology is the way to conceive digital information to go on a distributed channel without forging. Hence it is the new spoke of the new digital era.
This purpose is originally formulated for specific digital currency – Bitcoin. The tech world is now adapting various options where this technology can establish.
The name “digital gold” is apt for Bitcoin for a good reason. It helps us understand the total value of the currency and other digital values. Moreover, this technology is revolutionary and we will tell you why. The aim of Blockchain is to give a prime position to accountability. It is a reliable digital ledger of monetary transactions, that not only records financial transactions but basically everything of value. This technology is similar to the internet which has robust built to it. It has blocks stored with information which is exactly the same all over the network. The control to the blockchain does not lie in the hands of a single entity and is perfectly flawless. Invented in 2008, Bitcoin has operated without any obstruction. No invalid transactions, human or machine errors, or even an exchange without the consent is also on the note. As a result, it is a secure valid mechanism.
How does Blockchain work?
Blockchain technology significantly impacts on the society and global economy and promises a massive impact in future. This is just the beginning.
The new age coin known as bitcoin is a model of digital money initiated and retained electronically. The coin with no single entity to control it. And this coin is not printed like dollars. Production of this coin generates when the people start running computers which use software that solves mathematical issues. Therefore this is the example of developing a category of digital money known as Cryptocurrency.
Bitcoin is E-money, therefore we can buy things electronically. This coin is similar to that of conventional dollars or other currencies traded digitally.
This digital currency is different from conventional money because of the decentralization. It came to us from the software developer known as Satoshi Nakamoto. It is an electronic payment on the basis of mathematical proof. The idea was an independent and electronic transaction with low fees. This currency isn’t printed as it is in the digital form. A group that can join and processes these transactions in a distributed network (mining of coins) produces it. This network processes the transaction made with virtual currency. Therefore, making Bitcoin it’s own network for payment. The term conventional currency has always been on the basis of gold or silver. If you give money to the bank, you can get gold instead. Bitcoin doesn’t stand for gold, it stands on mathematics. Following mathematical formulas of software programs produces it because it is an open source software.
Features that stand out Bitcoin from government-backed currencies:
Classic cars and Bitcoins are hard to compare. But they have a couple of things in common: They are both scarce, and very much sought by a crowd of enthusiasts and adventurous investors. When taken together, scarcity and enthusiasm can deliver astronomical returns over time. Here are a few statistics compiled by MoneySuperMarket that confirm the relationship between scarcity and investor returns on classic cars: 1. Ferrari 250 GTO – Built in 1962, only 36 were made. This one, made specifically for Formula One racer Sir Stirling Moss, sold for a stunning $38,115,000 in 2012. 2. Mercedes Benz W196 – A former Formula One frequenter, the 1954 W196 won 9 of the 12 races it entered, and justly earned its seller $29,600,000 in 2013. 3. Jaguar D-Type – A conqueror of Le Mans in 1955, 56, and 57, the Jaguar D-Type would be hard to miss even without the eye-watering price tag of $21,780,000, recorded at auction in August 2016. Apparently, all three classic cars made their early owners multi-millionaires. “Car collecting is a strong industry - both for enthusiasts and for those looking to make a smart investment,” said a MoneySupermarket.com spokesperson. “Keeping track of which cars sell for the most year-by-year is a great way for both sides to make sure they come away from auctions satisfied - and for car lovers to keep an eye on their dream cars!” Bitcoin “collecting” is a strong industry, too, making some investors multi-millionaires quickly, very quickly. At least investors who poured money into the digital currency when it was trading at a tiny fraction of its current price.
Fund 12-month performance SPDR Gold Shares (GLD): -6.42% Bitcoin Investment Trust Shares (GBTC): 271.50% Source: Finance.yahoo.com 7/20/2017 Like in the car collecting industry, there’s a limited supply. And there’s plenty of hype about cryptocurrencies and the promises they hold for solving the ills of the global economy. Still, hype should never be a substitute for due diligence. With high returns come high risks that can result in hefty losses. Especially for those investors who join in the game last stage, when it turns into mania. Machines will become smarter than humans, and that's a good thing, says the CEO Masayoshi Son on Thursday said he sees a future where everyone and everything is connected to the internet, traffic accidents don't happen and robots are smarter than humans. And nowhere in that vision is there a hint of dystopia, stressed the SoftBank Group CEO, who was speaking at a company event in Tokyo. "I am a believer in the singularity thesis," the Japanese telecommunications company's 59-year-old founder said, referring to futurist Ray Kurzweil's hypothesis that machine intelligence will at some point exceed that of humans. Thanks to ever-accelerating progress in information technology, especially in computer chips, Son's vision is edging closer to reality. And he sees big opportunities in that. "Even if we took over the entire mobile phone market, that would still amount to just 7 billion lines," the CEO said. "We want to connect 1 trillion devices." Small wonder At the center of Son's vision of ubiquitous connectedness is ARM Holdings, a British chip designer that SoftBank bought last year for some $32 billion. Microprocessors designed by ARM power over 95% of the world's smartphones. More recently, the company has been funneling more resources into developing chips that connect everything from autoparts to home appliances. ARM CEO Simon Segars said that whereas once the company's chips were the size of a shirt button and had limited processing power, now "we can deliver thousands of times more computing power in basically the size of a pinhead. Processors can be so small that you can't see them," he said at the SoftBank event. The chips "can be deployed into anything and at very, very low cost," Segars said. "That is going to create a fundamental change in the way we gather and process data." One possible application for such technology is in driverless cars, which will require, for example, information about traffic and road conditions to be collected and processed in real time. Don't laugh at Pepper Robots also feature prominently in Son's prognostications. At the event, Boston Dynamics, a robotics company that SoftBank acquired last month from Alphabet Inc. -- Google's parent -- demonstrated a robotic dog that can walk and trot on two or four legs, play fetch and search for suspicious objects. "You can imagine it doing security out at a shopping center or a factory or a warehouse," Boston Dynamics CEO Marc Raibert said. Son is all for this kind of idea, and his investments show it. Last year, SoftBank launched a $93 billion technology fund designed to put the company at the forefront of emerging technologies, including artificial intelligence, robotics, the internet of things and big data. The company itself released a humanoid, Pepper, in 2014, though its capabilities are limited. Still, Son had a warning for those who dismiss Pepper as a mere toy. "Those who deride Pepper will face a future in which they will be overtaken by robots," he said. "Smart robots are fundamentally different from assembly robots that operate in factories," Son added. "Smart robots with artificial intelligence can learn by themselves and act on their own." Do humans face a future where machines will become our masters? Son doesn't think so. "AI is not created to put mankind at risk," he said. "It is created to make humans happy." ARM's Segars agreed. "Worrying about it is a wrong thing to focus on," he said. "I'm thinking about jobs that are going to be created. There are many new types of jobs being created all the time." Malaysian budget carrier wants its own version of AliPay and TripAdvisor DAVAO, Philippines -- AirAsia said Friday it plans to launch mobile payment services and other businesses, taking advantage of its growing brand recognition as it expands its footprint in the region. AirAsia group CEO Tony Fernandes revealed his “vertical integration” plan after an event marking a new route linking Kuala Lumpur and the Philippine city of Davao, on July 21 in Davao. The Malaysian budget carrier said the plans are part of "vertical integration" moves now that it has established a firm footing in Southeast Asia. The group is the largest discount player in the region by fleet size. "My goal is to take what we have succeeded with in ASEAN (Association of Southeast Asian Nations) and extend our products," AirAsia's group chief executive Tony Fernandes told the Nikkei Asian Review in an interview here. The company is waiting for Malaysia's central bank to approve a financial technology platform enabling in-flight purchases for the nearly 60 million passengers it carries annually. "I would like to use our data to create some fintech services, such as a payment system like (Chinese online payment platform) Alipay and by creating an online service for travelers, like our version of (U.S. travel website company) TripAdvisor," said Fernandes, adding that the company could also offer cargo-delivery services using its passenger flights. The remarks came after a launch event for the group's latest route, linking Kuala Lumpur and the southern Philippine city of Davao. It will be the carrier's fourth direct connection to the country after Manila, Cebu and Kalibo. The new service, which offers four flights a week, will commence on Dec. 21. It comes as the Philippine government under President Rodrigo Duterte is trying to boost investment in the southern part of the country.
Duterte was born in Davao, and his daughter Sara is the mayor. The president sees economic development as a key to rooting out Islamic extremists in the region. |
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