Jimmy Choo margins improve despite challenging environment

Jimmy Choo saw continued revenue growth ahead of the market in the six months to the end of June despite a challenging operating environment.

Overall revenue increased by 4.5% on a constant currency basis (16.5% on a reported basis) to £201.6m, with growth driven by retail, in line with the group's strategy.

Gross margin in the first half benefited from volume growth, lower markdowns and logistics costs as well as the movement in the pound, partially offset by the group's continued reinvestment in Men's and Fashion collections.

As a result, the gross margin improved by 0.2% to 63.8% (H1 2016: 63.6%).

Adjusted EBITDA increased by 19.5% year-on-year to £37.4m (H1 2016: £31.3m), equating to an improved adjusted EBITDA margin of 18.6% (H1 2016: 18.1%).

The group said the increase reflected both improvement in the gross margin and operating leverage on lower overheads.

Chief executive Pierre Denis said: "We are delighted with our performance during the period, having delivered growth in revenue and margins, despite challenging market conditions.

"Strong underlying cash conversion has also allowed us to deleverage, providing us with a stable platform to deliver further strong growth.

"Our long-term growth strategy is to nurture the brand's unique DNA, to strive for excellence in business execution and to enhance client experience, in order to deliver superior growth and profitability, as well as leveraging the significant investments we have made in the business to date.

"We have continued to make good progress through the first half and are well positioned to deliver over the remainder of the year."

Chairman Peter Harf added: "The strong performance in the first half of the year highlights the excellent strategic progress Pierre and his team have made further developing the Jimmy Choo brand and enhancing our global client offering.

"These strong foundations will prove to be invaluable as we embark on the next phase of our strategic development, and I would like to thank all Jimmy Choo employees for their continued energy and hard work as we look ahead. We are excited about the opportunities presented to Jimmy Choo through Michael Kors's all cash offer to our shareholders, as set out in the announcement on 25 July 2017.

"The shared vision and distinctive appeal of these two iconic brands will provide an exciting platform to achieve global leadership in luxury retail."