In a major move for the fashion industry, Tapestry will acquire the Kors-founded Capri Holdings, which additionally operates British fashion house Jimmy Choo.
Two major players in the fashion industry are coming together as one.
Tapestry, the parent company of Coach, Stuart Weitzman, and Kate Spade, will take over Capri Holdings, the two companies announced in an official statement early Thursday morning. The deal, which is reported to be worth $8.5 billion, will bring Capri portfolio companies Versace, Jimmy Choo, and Michael Kors into the Tapestry universe. Combined, the two companies boast $12 billion in annual revenue and an additional $2 billion in adjusted revenue.
The big move signals a new era of strategic mergers in the fashion and luxury goods industries.
“The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house,” Tapestry CEO Joanne Crevoiserat said of the news.
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Executives from both companies explained that in joining the two entities together, they would expand the market share for each and launches a new “global luxury house.” Tapestry CFO and COO Scott Roe pointed to the company’s positive cash flow as an essential asset to fuel the future success of both companies as they seek to expand their global footprint and come into competition with power players like LVMH. For Tapestry, the acquisition paves the way for a more comprehensive presence across Europe and the Middle East. Specifically for its newly-acquired brands, Tapestry’s legacy of success in Asia and its proven record as an innovator in direct-to-consumer experiences usher in a new era of possibility.
Additionally, the combination of the two companies will allow for cost-sharing opportunities in production.
Of course, these entities already had a historic foothold in the luxury space before their union. Most recently, Coach tapped Michael B. Jordan and Lil Nas X as global ambassadors as it seeks to expand its men’s lines. Versace, meanwhile, has linked with an endless list of celebrities throughout the Italian fashion house’s 45 years of life. Most recently, these have included K-Pop star Hyunjin, Dua Lipa, and Anne Hathaway as part of a loaded list of global stars.
As part of the merger, Capri shareholders will be paid out at $57 per share. As of this writing, Tapestry stock was down 12% in response to the news.
