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After Jimmy Choo, there comes Bally – JAB keeps divesting from luxury

By Angela Gonzalez-Rodriguez

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Business |ANALYSIS

German billionaire Reimann family's investment vehicle is letting its luxury holdings go, putting shoemakers Jimmy Choo and Bally International up for sale to focus on the food and beverage operations it has spent billions expanding in recent years.

JAB Holding Co. said earlier this week it's reviewing strategic options for both companies at a time when it's acquiring U.S. coffee chains. On a related note, the investment management firm is said to be ready to capitalise on a China-led revival in demand for luxury companies, which is boosting valuations.

The Bally review is expected to be completed in the second half of this year, JAB said. Bank of America Merrill Lynch and Citigroup are handling the auctions of both Jimmy Choo and Bally, according to JAB statements.

A decade of ownership changes for Bally

Bally was previously owned by U.S. buyout firm TPG Inc., which struggled to turn it round after years of losses. After nine years the TPG fund sold the Swiss label to the holding company founded by the Benckiser family, creating a new luxury and fashion group (Labelux) which had a turnover of 500 million Swiss francs goal for the suede loafers maker.

At the time it was acquired by Labelux, it had more than 400 million Swiss francs (402 million dollars) in annual sales. Bally was the first high-profile acquisition by the Labelux group, but not the only one: soon after it bought out Solange, a jewellery label by the London-based designer Solange Azagury-Partridge, the former creative director at Boucheron.

Before TPG took charge, Bally was suffering the effects of EBITDA losses of 100 million Swiss Francs, what prompted the nomination of Marco Franchini as the company’s new CEO, as well as the kick off of an ambitious restructuring plan of the whole company, from distribution to production, from consolidating the brand to reorganising the sales network.

In 2004 the company broke even again and in 2007 (with Brian Atwood appointed as creative director to give the brand an additional boost) Bally posted – in its words - an EBITDA “in double digits on the 400 million Swiss Francs in revenues.”

Foto: Suzy Handbag Collection, Bally Official Web

BALLY