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Coach owner buys Versace parent company to create new US luxury fashion giant

Coach owner buys Versace parent company to create new US luxury fashion giant
 (Getty Images)
(Getty Images)

Coach and Kate Spade owner Tapestry is to buy the company behind Michael Kors, Versace and Jimmy Choo, Capri Holdings, for $8.5 billion to create a new American luxury fashion giant.

Tapestry will pay $57 for each share of Capri, creating a business with global sales of more than $12 billion a year and annual profits of close to $2 billion.

The new company will be easily the biggest luxury fashion company in the US, and a rival to European giants like LVMH and Hermès International, which had huge success in recent years thanks to booming demand in Asia.

“This acquisition brings together six highly complementary brands with global reach, powered by Tapestry’s data-rich customer engagement platform and diversified, direct-to-consumer operating model,” Capiri said.

Tapestry CEO Joanne Crevoisera said,“We are excited to announce the acquisition of Capri Holdings – uniting six iconic brands and exceptional global teams.

“Tapestry is an organization with a passion for building enduring brands through superior design and craftsmanship and an unwavering focus on our customers. Importantly, we’ve created a dynamic, data-driven consumer engagement platform that has fueled our success, fostering innovation, agility, and strong financial results.

“From this position of strength, we are ready to leverage our competitive advantages across a broader portfolio of brands. The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house, unlocking a unique opportunity to drive enhanced value for our consumers, employees, communities, and shareholders around the world.”

John D. Idol, chairman and CEO of Capri, said: “Today’s announcement marks a major milestone for Capri. It is a testament to all that our teams have achieved in building Versace, Jimmy Choo, and Michael Kors into the iconic and powerful luxury fashion houses they are today. We are confident this combination will deliver immediate value to our shareholders. It will also provide new opportunities for our dedicated employees around the world as Capri becomes part of a larger and more diversified company. By joining with Tapestry, we will have greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands.”

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