Jimmy Choo has a spring in its step as trading proves strong

Jimmy Choo

Do you ever fail to trust your instincts? Yesterday I was talking to a friend of mine about Jimmy Choo’s trading update today and I noticed that the company’s shares had dropped to below £1 each. I thought I should buy some as a look round the Jimmy Choo shop in Selfridges a few days ago made me think that this brand really has the right product at the moment.

But I got distracted by the rain so my earth-shattering deal to buy 20 or so shares didn’t go through! And what happened today? Yep, the shares soared around 15% at one point after the company issued a trading update.

It said that, as I suspected, it’s doing a lot of the right things even though its share price has been on a downward trajectory ever since its last not-too-bad update.

Jimmy Choo

Some of that earlier decline would have been because the wider luxury market is in the doldrums. After all, if Prada’s suffering, why wouldn’t a smaller firm like Jimmy Choo?

Well the answer is that Choo hasn’t over-expanded in recent years and even though China is still a problem market for the luxury sector, it doesn’t have lots of expensive real estate in near-empty malls to pay for. What that means is that China is still an opportunity for the brand.

And it looks like lots of other markets are too with the company saying today that it has “made a good start to the year and trading is in line with expectations,” despite the headwinds facing the majority of the luxury sector in 2016.

Like others in the luxury sector, it’s keeping an eye on costs but “remains focused on controlled expansion and development of the retail portfolio while evolving the product mix with exciting new collections.”

Let’s hop the shares dip (temporarily) again soon so I can afford to buy some. Maybe a Brexit vote is an opportunity rather than the depressing prospect it feels like as share prices are likely to fall…

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