Jimmy Choo Quiet Lace Platform Pump that costs $625
Image taken from here.
Last month, Jimmy Choo, a luxury shoe brand, has announced its plan to go public later the year, which will make it the “very first luxury shoe to make an IPO move.” As Nodoka pointed out in her blog post, such move is a risky one because there is a potential to lose some customers who won’t buy these shoes anymore when brand becomes less exclusive. However, I think the benefits of going public override the potential disadvantages, for the following reasons:
- More Financial Inputs Available
Because of the nature of the brand, Jimmy Choo has many inventories, which translates to relatively less cash flow. IPO and further stock exchanges will help Jimmy Choo to achieve financial goals, meaning more “oxygen” for the business to operate with. In addition, more financial inputs, along with the exposure Jimmy Choo gets with the IPO, may “attract more talented designers, thus enhancing the brand.”
- Going Public ≠ Losing Most of Loyal Customers
Since when did “overexposure” become a problem when it comes to marketing? And it is not like Jimmy Choo is bombarding consumers’ minds with annoying ads. Indeed more stores and publicity might shun high-end customers who prefer the brand to be exclusive; however, these customers are but a small percentage of the population who have the purchasing power to afford a pair of Jimmy Choo shoes. If taking into account how many new customers the brand can draw with its new publicity, the loss of sales from these high-end shoppers shouldn’t be a concern huge enough to interrupt the decision of going public.
I think that, in the short run, Jimmy Choo will get more cash to operate with while not experiencing the downsides of overexposure (if any), and in the long run, its customer segments will gradually shift to include more people, which translates to more sales. Either way, their IPO will bring more advantages than disadvantages. It may seem have risks, but these risks are definitely worth taking.
Works Cited
Hashimoto, Nodoka. “Nodoka Hashimoto’s Blog.” Nodoka Hashimotos Blog. N.p., n.d. Web. 5 Oct. 2014. <https://blogs.ubc.ca/nodokahashimoto/>.
Hill, Catey. “Jimmy Choo’s IPO could make the shoes less chic.” – MarketWatch. N.p., n.d. Web. 5 Oct. 2014. <http://www.marketwatch.com/story/will-jimmy-choos-ipo-make-the-shoes-less-chic-2014-09-23>.
“Jimmy Choo.” Polyvore. N.p., n.d. Web. 5 Oct. 2014. <http://www.polyvore.com/jimmy_choo/collection?id=3869617>.