Tapestry, the parent company of Coach and Kate Spade, has paid $8.5 billion (in cash, no less) to snap up Capri Holdings, the parent of Versace, Michael Kors, and Jimmy Choo in a deal that creates a sprawling new luxury conglomerate.
“The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house, unlocking a unique opportunity to drive enhanced value for our consumers, employees, communities, and shareholders around the world,” said Joanne Crevoiserat, CEO of Tapestry, in a statement.
Tapestry's Capri acquisition, first reported by the Wall Street Journal, immediately boosted Capri shares by 58% before markets opened, marking a big gain for a company that has seen a slow dip in share prices over the year; Capri Holdings shares were trading at $68.38 in February but slumped to $34.61 by August 2023 prior to the acquisition news.
Tapestry, meanwhile, has remained fairly consistent in the same timeframe, with share prices mostly hovering around the mid $40s, though it dipped to $35.85 once the Capri acquisition was announced.
The Tapestry-Capri acquisition will likely close in 2024 and expect to see the effects of the deal, if any, in the ensuing years.
Capri Holdings was formed in 2019 once the Michael Kors company acquired Jimmy Choo (in 2017) and Versace (in 2018). As of 2023, Capri's yearly revenue is about $5.6 billion.
Tapestry has most recently reported expectations of $6.7 billion for fiscal year 2023.
The Tapestry-Capri acquisition is one of the fashion industry's largest purchases in years, perhaps since LVMH purchased Tiffany & Co. for an imposing $15.8 billion.
