Luxury fashion giant, Capri Holdings, is exploring the sale of Versace and Jimmy Choo after an $8.5 billion acquisition attempt by Tapestry Inc was axed by the court. This would leave Capri with a portfolio of solely Michael Kors.
Capri is in the process of exploring the sale of these brands with the assistance of Barclays, according to WWD. However, it is yet to be disclosed whether the brands will be sold separately or as a package deal.
Last year Tapestry Inc announced it would acquire rival American fashion conglomerate Capri in a deal valued at £6.6 billion ($8.5 billion). This deal would marry America’s two largest luxury houses. Fast forward to 2024, a federal judge has blocked the merger, following a trial held last month in New York.
However, Judge Jennifer Rochon granted the Federal Trade Commission’s (FTC) motion for a preliminary injunction to block the proposed merger. According to the FTC, if the merger went ahead, it would negatively affect consumers by making the affordable handbag market less accessible.
Capri previously considered selling Versace and Jimmy Choo back in 2022 and has re-engaged discussions with potential buyers, including holding companies and luxury firms.
Last month, Capri Holdings revealed it has been hit by the slump in the luxury market. Revenues were down by 16.4% to £830 million ($1.08 billion) in the second quarter of Fiscal 2025.
During the second quarter, ending 28 September, the group’s adjusted operating margin was 3% and adjusted earnings per share were £0.50 ($0.65). Gross profit was £535 million ($694) million and gross margin was 64.3%, compared to £642 million ($832) million and 64.4% in the prior year.
Brand breakdown:
- Versace’s revenue of £155 million ($201 million) decreased by 28.2%
- Jimmy Choo’s revenue of £108 million ($140 million) increased by 6.1%
- Michael Kors’ revenue of £569 million ($738 million) decreased by 16%
Moving forward, Capri is now focused on revitalising Michael Kors and expanding its product offering.
