Tapestry, the US-based owner of premium lifestyle brand Coach, has announced the acquisition of Capri, Versace’s parent company. The deal will be valued at $8.5 billion. The combination will establish an American luxury fashion conglomerate capable of competing with European powerhouses such as LVMH and Kering. The transaction “creates a new powerful luxury global house,” according to Tapestry CEO Joanne Crevoiserat.
Six luxury brands will be housed in the new company
Six significant luxury brands will be housed within the single business. Coach, Stuart Weitzman, and Kate Spade are all owned by Tapestry. Versace, Jimmy Choo, and Michael Kors are all descendants of Capri. Tapestry is more popular in Asia, while Capri is more popular in Europe. This merger enables Tapestry to pursue a strategy similar to that of European powerhouses, focusing on a diversified portfolio of brands that appeal to many segments.
The corporations hope to save $200 million per year
The all-cash acquisition intends to increase sales by combining consumer data streams, expanding geographic reach, and saving $200 million per year within three years of closing. Tapestry and Capri combined for $12 billion in revenue last year, while LVMH recorded $87 billion. Tapestry’s direct-to-consumer business and Capri’s legacy fame, on the other hand, are projected to help both develop even further.
