NEW YORK. Tapestry, the parent company behind the esteemed luxury handbag and accessories retailer Coach, has announced its acquisition of Capri Holdings, the owner of prominent fashion brands including Michael Kors, Versace, and Jimmy Choo. The fashion industry’s trend of consolidation continues, as major players in the U.S. aim to solidify their influence in the European market. The deal, valued at approximately $8.5 billion (7.7 billion euros), positions Tapestry to compete more effectively against rivals such as LVMH and Kering.
Tapestry Inc., which also encompasses brands like Kate Spade and Stuart Weitzman, revealed on Thursday that the merged entity would boast global annual sales surpassing $12 billion (10.9 billion euros) and would maintain a presence in over 75 countries. While Tapestry’s market capitalization stands at nearly $10 billion (9.1 billion euros), Capri’s is currently valued at around $4 billion (3.6 billion euros).
Tapestry CEO Joanne Crevoiserat conveyed the significance of this merger, stating, “The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house.” Shareholders of Capri Holdings Ltd. are set to receive $57.00 (51.9 euros) per share in cash as part of the agreement.
Capri Chairman and CEO John Idol emphasized the strategic advantage of the acquisition, noting, “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.”
In recent months, other major fashion conglomerates have made significant moves in the industry. French luxury giant Kering secured a deal to acquire a 30% stake in Italian fashion house Valentino, demonstrating their commitment to growth and influence. Additionally, LVMH made headlines in 2021 with its acquisition of renowned jewelry company Tiffany.
The acquisition of Capri Holdings presents Tapestry with several strategic benefits. Neil Saunders, managing director of GlobalData, commented that the merger would establish “an American fashion giant that, while not quite as prestigious or large as its European counterparts, would wield significant influence in the luxury market.” As the luxury sector encounters a slowdown, particularly in the North American market, brands like Tapestry and Capri are shifting focus to international markets to drive growth.
Both the boards of Tapestry and Capri have granted approval for the deal, which is anticipated to be finalized in the coming year, pending approval from Capri shareholders.
In reaction to the news, Capri’s stock surged by 58% before the market’s opening on Thursday, while Tapestry’s shares experienced a decline of 3.7%.
Paraluman P. Funtanilla
Paraluman P. Funtanilla is Tutubi News Magazine's Marketing Specialist and is a Contributing Editor. She finished her degree in Communication Arts in De La Salle Lipa. She has worked as a Digital Marketer for start-up businesses and small business spaces for the past two years. She has earned certificates from Coursera on Brand Management: Aligning Business Brand and Behavior and Viral Marketing and How to Craft Contagious Content. She also worked with Asia Express Romania TV Show.
