By Michelle Chapman
Tapestry, the parent company of luxury handbag and accessories retailer Coach, is buying the owner of fashion brands including Michael Kors, Versace and Jimmy Choo, Capri Holdings.
Big fashion has been getting even bigger through a spate of acquisitions as U.S. players seek more sway in Europe. The approximately $8.5 billion (7.7 billion euro) deal puts Tapestry in a better position to do just that in going-to-toe with rivals like LVMH and Kering.
Tapestry Inc., whose brands also include Kate Spade and Stuart Weitzman, said Thursday that the combined company had global annual sales of more than $12 billion (10.9 billion euro) and has a presence in more than 75 countries. Tapestry has a market cap of nearly $10 billion (9.1 billion euro), while Capri's is around $4 billion (3.6 billion euro).
Once completed, the new entity will be the fourth largest luxury company in the world, with a combined market share of around 5.1% of the luxury goods market, according to research firm GlobalData PLC. In the Americas, the company will become the second largest luxury player behind LVMH, with a combined share of 6% of the luxury goods market, GlobalData said.
“The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house,” Tapestry CEO Joanne Crevoiserat said in a prepared statement.
Capri Holdings Ltd. shareholders will receive $57.00 (51.9 euro) per share in cash.
"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,” Capri Chairman and CEO John Idol said.
French luxury conglomerate Kering reached a deal in July to buy a 30% stake in Italian fashion house Valentino for 1.7 billion euros from Qatari investment firm Mayhoola. Under the agreement, Kering, which owns Gucci, has the option to buy 100% of Valentino no later than 2028.
Kering had also tried to snap up Tom Ford, but beauty company Estee Lauder wound up reaching a deal with the luxury goods maker.
LVMH, meanwhile, purchased famed jewelry company Tiffany in 2021 after a back-and-forth between the two companies over the agreement.
Buying Capri is a strategic move for Tapestry on many levels.
Neil Saunders, managing director of GlobalData, said the acquisition will “create an American fashion giant that, while not quite as prestigious or large as its European counterparts, would wield a significant influence in the luxury market.”
“Luxury is facing something of a slowdown, especially in the North American market where consumers, even at the higher income end of the market, are starting to curtail spending," Saunders said. “This has put pressure on Tapestry and Capri, both of which are now looking to international markets to bolster growth.”
The boards of Tapestry and Capri have approved the deal, which is expected to close next year. It still needs approval from Capri shareholders.
Capri's stock jumped 56%, or $19.35 to $53.96 in early morning trading on Thursday, while shares of Tapestry fell almost 12%, or $4.87, to $36.38.
President Donald Trump has fired one of two Democratic members of the U.S. Surface Transportation Board to break a 2-2 tie ahead of the board considering the largest railroad merger ever proposed.
Ford is recalling more than 355,000 of its pickup trucks across the U.S. because of an instrument panel display failure that’s resulted in critical information, like warning lights and vehicle speed, not showing up on the dashboard.
Nvidia reported a 56% increase in second-quarter revenue and a 59% rise in net income compared to a year ago.
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Netflix CEO Ted Sarandos claims audiences don't want to watch Netflix movies in theaters, but that seems not to be the case recently.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
