Tapestry, parent company of Coach, Kate Spade and Stuart Weitzman, is acquiring Capri Holdings, owner of Michael Kors, Versace and Jimmy Choo in a landmark US$8.5 billion deal.
The move will unite the six complementary brands and expands Tapestry’s reach across consumer segments, geographies and categories.
Together, Tapestry and Capri Holdings generated over US$12 billion in revenue in FY2022. The companies are present in over 75 countries, achieving nearly US$2 billion in adjusted operating profit last year.
The acquisition will generate cost synergies of over US$200 million on a run-rate basis. It will also expand all brands’ global reach, powered by Tapestry’s data-rich customer engagement platform and diversified direct-to-consumer operating model.
The deal is set to close in 2024 subject to the approval of Capri Holdings shareholders.
The acquisition will build Tapestry’s portfolio in the attractive US$200 billion global luxury market for handbags, accessories, footwear and apparel, where the company has deep expertise. It also drives the geographical diversification of both companies’ complementary positions in Asia Pacific and Europe.
Tapestry Chief Executive Officer Joanne Crevoiserat commented: “We are excited to announce the acquisition of Capri Holdings – uniting six global brands and exceptional global teams. Tapestry is an organisation with a passion for building enduring brands through superior design and craftsmanship and an unwavering focus on our customers.
“Importantly, we’ve created a dynamic, data-driven consumer engagement platform that has fuelled our success, fostering innovation, agility and strong financial results. From this position of strength, we are ready to leverage our competitive advantages across a broader portfolio of brands.
“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.”
Capri Holdings Chairman and Chief Executive Officer John D. Idol said: “The acquisition of Capri Holdings accelerates our strategic agenda and represents a significant value creation opportunity. Importantly, this combination is immediately accretive on an adjusted basis and enhances Tapestry’s total shareholder return.
“This includes more than US$200 million in expected run-rate cost synergies within three years of deal closing. Further, our diversified, strong, and consistent cash flows will allow us to continue to invest in our business and rapidly pay down debt – aligned with our commitment to maintaining an investment grade rating – while returning capital to shareholders, including today’s announced 17% increase in our dividend per share.
“Overall, we are disciplined financial operators and allocators of capital with a relentless drive to deliver meaningful shareholder value,” he concluded. ✈
