=Michael Kors (KORS) to buy luxury shoemaker Jimmy Choo for $1.2 billion

• Michael Kors agrees to acquire Jimmy Choo (OTCPK:JYMHF) for $1.2B. The company expects to grow Jimmy Choo sales to $1B a year and create long-term operational synergies with the MK business. The deal follows a move earlier this year by luxury rival Coach (NYSE:COH) to snap up Kate Spade. Shares of Michael Kors (NYSE:KORS) are down 19% YTD.

LONDON (Reuters) - U.S. retailer Michael Kors (KORS) has agreed to buy luxury shoemaker Jimmy Choo (CHOO.L) for $1.2 billion, snapping up a British company whose towering stilettos have been made famous by celebrity customers from Princess Diana to Kendall Jenner.

The move comes two months after rival handbag maker Coach (COH) struck a deal to buy quirky fashion brand Kate Spade & Co (KATE), as so-called affordable luxury companies look to go into new markets to try to boost flagging sales.

"Jimmy Choo is an iconic premier luxury brand that offers distinctive footwear, handbags and other accessories," said Michael Kors, honorary chairman and chief creative officer.

"We admire the glamorous style and trend-setting nature of Jimmy Choo designs."

Founded by bespoke shoemaker Jimmy Choo in the east end of London in the 1990s, Jimmy Choo Plc listed at 140 pence in 2014 and will sell out at 230 pence.

Its strong performance stands in contrast to Michael Kors which has lost 65 percent of its market value since 2014 due to fierce competition at the more affordable end of the luxury market and a drop in customers at department stores.

Michael Kors, which has tried to fight back by expanding into dresses and menswear and its online business, said in May that sales at stores established for more than a year fell 14 percent in its fiscal fourth quarter.

Under the terms of the deal, it will pay a premium of 36.5 percent to buy Jimmy Choo compared with the British firm's share price before it was put up for sale.

At 1015 GMT, Jimmy Choo shares were up 17 percent at 228.25 pence. The company makes three quarters of its revenue from selling shoes and has a presence across the world, including around 150 company-operated retail stores.