Tapestry acquires Capri Holdings for $8.5 billion

In a move destined to reshape the luxury fashion landscape, the parent company of Coach, Tapestry, has announced the acquisition of Capri Holdings, the owner of prestigious brands such as Michael Kors, Versace, and Jimmy Choo, in an $8.5 billion deal. The acquisition will amplify Tapestry's significance on the international stage by adding world-renowned brands including Michael Kors, Versace, and Jimmy Choo to its existing lineup alongside Coach, Kate Spade, and Stuart Weitzman. This strategic decision, as reported by BoF, aims to create new synergies among the brands and capture a broader market share to compete with European giants like LVMH and Kering.

In fact, while European brands continue to expand their portfolios, American fashion companies have struggled to regain lost ground. Both Tapestry and Capri Holdings have already demonstrated their commitment to growth through strategic acquisitions: in 2017, Tapestry, previously known as Coach Inc, acquired Kate Spade for $2.4 billion, followed by Capri (then known as Michael Kors), which acquired Jimmy Choo for $1.2 billion in the same year. In 2018, Capri further solidified its position by acquiring Versace for $2.2 billion. However, despite their efforts, American fashion companies remain relatively smaller compared to their European competitors. Tapestry has a market capitalization of approximately $10 billion, while Capri is estimated to be around $4 billion. In stark contrast, Kering is valued at approximately $72 billion, and the industry leader LVMH, with 75 brands under its umbrella, boasts a market capitalization of a staggering $456 billion. Nonetheless, this acquisition deal could mark a turning point in the competition between American and European fashion brands.