Tapestry, Inc. – <a conglomerate of iconic brands Coach, Kate Spade and Stuart Weitzman> and Capri Holdings Limited <a global fashion luxury group consisting of Versace, Jimmy Choo and Michael Kors> recently announced that they have entered into a definitive agreement under which Tapestry will acquire Capri Holdings. Capri Holdings shareholders will receive $57.00 per share in cash for a reported enterprise value of $8.5 billion.
“It is a testament to all that our teams have achieved in building Versace, Jimmy Choo and Michael Kors into the iconic and powerful luxury fashion houses they are today. We are confident this combination will deliver immediate value to our shareholders. It will also provide new opportunities for our dedicated employees around the world as Capri becomes part of a larger and more diversified company. By joining with Tapestry, we will have greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands,” explains John D. Idol, Chairman and Chief Executive Officer of Capri Holdings Limited.
This blockbuster acquisition brings together six powerhouse brands across consumer segments and extends global reach and geographic diversification given the Tapestry and Capri Holdings’ highly complementary respective positions in Asia and Europe. The merging of two American giants also creates opportunities for US fashion brands to compete with European heavyweights like LVMH Moët Hennessy Louis Vuitton and Kering. More importantly the acquisition creates opportunity to leverage Tapestry’s Direct-to-Consumer model and creates potential for significant cost synergies.
“This combination is immediately accretive on an adjusted basis and enhances Tapestry’s total shareholder return. This includes more than $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” Tapestry Inc. Chief Financial Officer and Chief Operating Officer, Scott Roe said in a company release.
The Boards of Directors of Tapestry Inc. and Capri Holdings Limited have unanimously approved the transaction, which is expected to close in 2024, subject to approval by the Capri Holdings shareholders as well as the receipt of required regulatory approvals and other customary closing conditions.
Jasmeen Dugal is a senior writer and author for FashionABC where she is responsible for writing stories that cover the fashion industry as a whole, from fashion events to innovative brands that are transforming the industry through the use of the metaverse, sustainability, and new digital solutions. She is also very active on Instagram with more than 92k followers.
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Four years ago, Jasmeen embarked on a new adventure and launched her own luxury portal, where she continues to focus on telling the stories of the people behind the brands. Her unique approach to editorial has helped her stand out in the industry, and her work is highly regarded by her peers.
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