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While some Fashion Victims do their utmost to slim down, some fashion groups find it difficult to gain the weight<\/strong> they want…<\/p>\n <\/p>\n Such is the case with Capri Holdings<\/strong>. Not only is the owner of the Jimmy Choo, Michael Kors and Versace<\/strong> brands encountering obstacles in its merger process with its compatriot Tapestry (Coach, Kate Spade New York and Stuart Weitzman)<\/strong>. But it has also just posted a below-expectations fourth quarter for 2024, which closed at the end of March<\/strong>.<\/p>\n <\/p>\n Between January and March<\/strong>, Capri Holdings’ sales fell by 8.4%<\/strong> to $1.223 billion (\u20ac1.131 billion). The consensus analyst estimate was for a better result of $1.29 billion. For the fiscal year as a whole,<\/strong> Capri lost 7.6%<\/strong> to $5.17 billion.<\/p>\n <\/p>\n <\/p>\n In other bad news, the net loss worsened<\/strong> from $34 million last year to $472 million for fiscal 2023-24. The company’s adjusted operating margin is down to 6.4% from 9.1% in the previous year, mainly due to a decline in full-price sales.<\/strong><\/p>\n <\/p>\n\n <\/p>\n At $0.42 (euros), adjusted earnings per share (EPS) fell short of analysts’ expectations<\/strong> ($0.67 or euros).<\/p>\n <\/p>\n All the Group’s Houses were down in the last quarter. Michael Kors (-9.7%<\/strong> on a reported basis<\/strong> to $822 million) and Jimmy Choo (-9.3%<\/strong> to $137 million) saw their sales fall the most. Versace<\/strong> limited the damage more (- 3.6% in declared value and – 2.9% at constant exchange<\/strong> rates<\/strong> to 264 million dollars).<\/p>\n <\/p>\n Over the full year<\/strong>, all brands suffered a reduction in scope: Michael Kors sales fell from $3.88 billion last year to $3.5 billion in 2023-24, Versace from $1.1 billion to just over $1 billion, and Jimmy Choo from $633 million to $618 million.<\/p>\n <\/p>\n In a statement, Capri Holdings CEO John Idol admitted disappointment<\/strong> at the results, explaining that the brands’ \u201cperformance\u201d in the fourth quarter had \u201ccontinued to be affected by the slowdown in global demand for fashion and luxury goods\u201d.<\/strong><\/p>\n <\/p>\n <\/p>\n \u201cIn our retail channel, sales trends improved sequentially in the Americas and EMEA<\/strong>, while trends slowed in Asia<\/strong>. In our wholesale channel, sales remained difficult<\/strong>,\u201d he added.<\/p>\n <\/p>\n At the same time, the Group also reduced the number of points of sale in its own network to 1,272 at the end of the 2023-24 financial year<\/strong>, compared with 1,239 a year earlier. The number of units increased from 223 to 236 at Versace, but fell from 237 to 234 at Jimmy Choo and from 812 to 769 at Michael Kors.<\/p>\n <\/p>\n John D. Idol argued, however, that Versace, Jimmy Choo and Michael Kors had \u201ccontinued to appeal<\/strong> to consumers, as evidenced by the 11.6 million new customers<\/strong> added to our databases, a 14% growth over last year.\u201d<\/p>\n <\/p>\n In any case, in addition to sales on a slippery slope, the head of Capri Holdings has another pebble in his shoe. Last summer, the group reached a definitive agreement to be acquired by Tapestry.<\/strong><\/p>\n <\/p>\n Today, however, he is facing a lawsuit from the FTC (Federal Trade Commission), which is seeking to block the transaction.<\/strong><\/p>\n <\/p>\n <\/p>\n \u201cWe disagree with the FTC’s decision<\/strong> and strongly believe in the merits of this acquisition,\u201d said John D. Ido, confirming that Capri \u201cintends to vigorously defend this matter in court<\/strong> alongside Tapestry\u201d and that it was \u201clooking forward to the successful completion of the pending acquisition.\u201d<\/p>\n <\/p>\n \u201cMarket realities, which the government disputes, overwhelmingly demonstrate that this transaction will not limit, reduce or restrict competition<\/strong>,\u201d pleads the executive. Tapestry and Capri operate in the highly competitive and fragmented global luxury fashion industry. Consumers have hundreds of handbag choices at all price points, in all channels, and barriers to entry are low.<\/p>\n <\/p>\n The CEO of Capri Holdings is in no doubt: the merger of the two groups into a super American luxury player \u201cwill bring value to its shareholders, offer new opportunities to its employees and enable Versace, Jimmy Choo and Michael Kors to increase their expansion\u201d.<\/strong><\/p>\nA widening loss<\/h2>\n
Improvement in the Americas and EMEA, but slowdown in Asia.<\/h2>\n
Merger with Tapestry blocked by the FTC<\/h2>\n
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