What gets measured gets managed [but some of the most important issues in strategic management cannot be quantified at all].
Jimmy Choo makes great shoes. A Malaysian fashion designer, Jimmy Choo’s business attracted global attention when his shoes were worn by Princess Diana, and then were made famous by the US TV series “Sex and the City”.
But just three years after listing on the UK stock market, the business has been put up for sale. Its owner, JAB Holdings, the investment vehicle of the German Reimann family, are unwinding their positions in high-end goods and focusing upon lower-value consumer products.
At the time of writing, Jimmy Choo’s reported profits are £59m, its shares are trading at 204 pence and at a PE of 49x. There is speculation that Coach, the US handbag giant, has enough cash to offer £1bn for the company. These look like big numbers and on the face of it Jimmy Choo, the company, seems successful. But any potential acquirer needs to fully evaluate Jimmy Choo’s stand-alone strategic performance before it considers what it might bring to the business as a new parent. And Jimmy Choo’s current managers need to be mindful of the damage that a new parent could do to the family brand.
So, how has Jimmy Choo performed to date? How should its strategic performance be evaluated? What are its prospects for the future? Our first Pathway chapter set out the importance of having a clear over-arching strategic purpose ...