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Is Capri over? That’s THE question on everyone’s lips, as the multinational Tapestry, which owns the Coach, Kate Spade and Stuart Weitzman brands, has just announced the signing of a “definitive agreement<\/em>” to buy Capri Holdings (Michael Kors, Versace and Jimmy Choo).<\/p>\n <\/p>\n In trading before the opening of the New York Stock Exchange<\/strong> this morning, Capri shares climbed 31%, while Tapestry shares gained 1.2%.<\/p>\n <\/p>\n At yesterday’s close, Capri had a market capitalization of $4 billion<\/strong> and Tapestry around $10 billion<\/strong>, according to Refintiv data. This financial exchange could value the group that owns Michael Kors at between $7 and $9 billion.<\/p>\n <\/p>\n It will propel Tapestry into the ranks of a major luxury goods group, putting it on a par with its European counterparts.<\/p>\n <\/p>\n According to GlobalData analyst Neil Saunders, the new group is set to become the world’s fourth-largest luxury goods group<\/strong>, with a market share of around 5.1%, behind French giants LVMH, Kering and Chanel<\/strong>.<\/p>\n <\/p>\n In the Americas alone, it would be in second place (6%), well behind LVMH (21.4%).<\/p>\n <\/p>\n The deal could also give a new impetus to both companies, at a time when the US retail sector is facing weaker demand<\/strong>, due to inflation, and an uneven recovery in the Chinese market<\/strong>.<\/p>\n <\/p>\n “Weaker demand has put pressure on Tapestry and Capri, who are now looking to international markets to support their growth. There’s more security in embarking on bold international projects together<\/em>” said Neil Saunders.<\/p>\n <\/p>\n According to Capri CEO John Idol, the two companies are “very complementary” in terms of geographical distribution, with one having a stronger presence in Asia – Tapestry generates 65% of its business in America and 29% in Asia – and the other more present in Europe – Capri generates 56% in America, 28% in Europe\/Middle East and 16% in Asia.<\/p>\n <\/p>\n Combined sales exceed $12 billion, and the new entity will employ over 33,000 people.<\/p>\n <\/p>\n <\/p>\n Tapestry, formerly known as Coach Inc, bought the Kate Spade handbag brand in 2017 for $2.4 billion.<\/p>\n <\/p>\n That same year, Capri, previously known as Michael Kors, snapped up British brand Jimmy Choo<\/strong> for $1.2 billion. A year later, the group acquired Italian fashion house Versace for $2.2 billion<\/strong>.<\/p>\n <\/p>\n At a time when Europe’s largest luxury groups, such as LVMH and Kering, are gradually expanding their portfolios by acquiring high-end brands, Tapestry’s acquisition of Capri could be the start of a resurgence in financial transactions in the American luxury sector<\/strong>.<\/p>\n <\/p>\n After acquiring blue jeweler Tiffany & Co in 2021 for $15.8 billion, LVMH has decided to continue investing in the jewelry sector by buying French group Platinium Invest. For its part, Kering has declared that it is taking a 30% stake in the Italian brand Valentino<\/a>.<\/p>\n <\/p>\n With its new and existing labels, will Tapestry be able to overshadow the French and European luxury giants<\/strong>?<\/p>\n <\/p>\n Experts disagree, especially as Tapestry’s initial portfolio of Coach and Kate Spade are not necessarily perceived as luxury brands<\/strong>. In this game, the big Western houses like Dior and Chanel have the advantage.<\/p>\n <\/p>\n The only brands with a luxury aura on both sides of the Atlantic remain Tiffany & Co, now under the LVMH umbrella, and Ralph Lauren, which for the time being retains its independence.<\/p>\n <\/p>\n However, the rise of luxury could come from Versace or even Michael Kors<\/strong> – the driving force behind Capri Holdings – but only if the jet-setting brand’s image of exclusivity is overhauled<\/strong>.<\/p>\n <\/p>\n A strategy that will undoubtedly involve a price increase, but not the only one.<\/p>\n <\/p>\n Finally, the newly-formed Tapestry group, which is essentially focused on the fashion and leather goods sector, looks set to be far less diversified than the LVMH group<\/strong> and its 75 Houses. Since its foundation in 1987, the group has been present in fashion and accessories, as well as wines and spirits.<\/p>\n <\/p>\n Thanks to their licensing agreements, the newcomers have enabled the group to strengthen its position in perfumes and cosmetics, as well as in interior design and hotels<\/strong> via Versace. For its part, the acquisition of Jimmy Choo enables the group to penetrate the footwear market<\/strong> with its first iconic brand.<\/p>\n <\/p>\n Read also >Results: Tapestry pleasantly surprises, Capri disappoints<\/a><\/p>\n <\/p>\n Featured photo : \u00a9Press[\/vc_column_text][\/vc_column][\/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]<\/p>\n <\/p>\n Is Capri over? That’s THE question on everyone’s lips, as the multinational Tapestry, which owns the Coach, Kate Spade and Stuart Weitzman brands, has just announced the signing of a “definitive agreement” to buy Capri Holdings (Michael Kors, Versace and Jimmy Choo).<\/p>\n <\/p>\n In trading before the opening of the New York Stock Exchange this morning, Capri shares climbed 31%, while Tapestry shares gained 1.2%.<\/p>\n <\/p>\n At yesterday’s close, Capri had a market capitalization of $4 billion and Tapestry around $10 billion, according to Refintiv data. This financial exchange could value the group that owns Michael Kors at between $7 and $9 billion.<\/p>\n <\/p>\n It will propel Tapestry into the ranks of a major luxury goods group, putting it on a par with its European counterparts.<\/p>\n <\/p>\n According to GlobalData analyst Neil Saunders, the new group is set to become the world’s fourth-largest luxury goods group, with a market share of around 5.1%, behind French giants LVMH, Kering and Chanel.<\/p>\n <\/p>\n In the Americas alone, it would be in second place (6%), well behind LVMH (21.4%).<\/p>\n <\/p>\n The deal could also give a new impetus to both companies, at a time when the US retail sector is facing weaker demand, due to inflation, and an uneven recovery in the Chinese market.<\/p>\n <\/p>\n “Weaker demand has put pressure on Tapestry and Capri, who are now looking to international markets to support their growth. There’s more security in embarking on bold international projects together<\/em>” said Neil Saunders.<\/p>\n <\/p>\n According to Capri CEO John Idol, the two companies are “very complementary” in terms of geographical distribution, with one having a stronger presence in Asia – Tapestry generates 65% of its business in America and 29% in Asia – and the other more present in Europe – Capri generates 56% in America, 28% in Europe\/Middle East and 16% in Asia.<\/p>\n <\/p>\n Combined sales exceed $12 billion, and the new entity will employ over 33,000 people.<\/p>\n <\/p>\n <\/p>\n […][\/vc_column_text][vc_cta h2=”This article is reserved for subscribers.” h2_font_container=”tag:h2|font_size:16|text_align:left” h2_use_theme_fonts=”yes” h4=”Subscribe now !” h4_font_container=”tag:h2|font_size:32|text_align:left|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”I SUBSCRIBE !” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true” btn_link=”url:https%3A%2F%2Fluxus-plus.com%2Fen%2Fsubscriptions-and-newsletter-special-offer-valid-until-september-30-2020-2-2%2F”]Get unlimited access to all articles and live a new reading experience, preview contents, exclusive newsletters…<\/p>\nTapestry: future LVMH competitor?<\/h2>\n
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Tapestry, parent company of Coach, is in the process of acquiring Capri Holdings, owner of the Michael Kors and Versace brands. The deal, valued at $8.5 billion, is designed to create a strong American competitor to the sector’s powerful European players, LVMH and Kering.<\/h4>\n
Tapestry: future LVMH competitor?<\/h2>\n