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Choo choo - all aboard for shoemaker IPO

Friday, October 17, 2014 - 02:17

Luxury shoemaker Jimmy Choo braves a difficult IPO market with a share offer priced at the bottom of its range. As Melanie Ralph reports, Choo's market performance is seen by many as a test of IPOs to come.

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Jimmy Choo is teetering on the edge of global expansion as it floats shares on the FTSE 100. The initial offering price wasn't as high as its heels, so unsurprisingly shares ticked up on its debut. Shares in the brand opened at 141 pence, up 0.7 percent on the 140 pence offer price. With other big name brands like Virgin Money deciding to delay their IPOs until markets pick up, all eyes will be on whether the luxury shoemaker will continue to cobble up the gains. Worries over global growth has caused stock markets to take a tumble. IPO action has been hurt on the back of it. Going forward for Jimmy Choo however, they'll face another hurdle, and that's the backdrop of a struggling luxury brand sector. Shares in Mulberry dived after a full-year profits warning. The luxury handbag maker made the mistake of trying to move into the higher end of the luxury market -- a move that proved costly. Jimmy Choo will be faced with similar strategic challenges. The new money raised on the market will be partly invested in opening more stores --- in particular an expansion in China. BGC's Mike Ingrams says if done too fast, Choo shares could take a stumble. (SOUNDBITE) (English) MIKE INGRAM, MARKET ANALYST AT BGC PARTNERS, SAYING: ''We still have a situation where there is a big question mark over emerging market growth, over growth specifically in China. Until there's more clarity on the growth picture, particularly in that part of the world, I think it's going to be very difficult to see these high beta stocks, such as Jimmy Choo, actually making substantial headway.'' Jimmy Choo's shoes have been linked with famous faces including Princess Diana an d Kate Middleton. Conlumino's retail expert, Anusha Couttigane, says there's space in the market for Choo's niche product (SOUNDBITE) (English) ANUSHA COUTTIGANE, RETAIL ANALYST AT CONLUMINO, SAYING: ''The shoe luxury market is probably a little under-penetrated compared to other accessories. We think of handbag brands, we think of jewelry brands, even make-up brands, but shoe brands are not as big, and I think Jimmy Choo is one of those iconic shoe brands and that's what makes it different.'' Jimmy Choo's decision to float its brand on the stock market at a time when markets are falling may be considered brave by some. Markets and traders alike will be keeping a close eye on whether Choo's shoes will continue to strut its stuff.

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Choo choo - all aboard for shoemaker IPO

Friday, October 17, 2014 - 02:17