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The parent company of Coach has set its sights on forging the ultimate powerhouse in the realm of luxury fashion within the United States through its acquisition of Capri Holdings.
This strategic merger brings together Tapestry’s prestigious stable of brands – Coach, Kate Spade, and Stuart Weitzman – harmoniously joining forces with Capri’s illustrious trio – Versace, Jimmy Choo, and Michael Kors. The culmination of these iconic labels forms an opulent U.S. fashion conglomerate valued at a staggering $12 billion.
Following a protracted period of negotiations between these corporate entities, this acquisition marks a monumental leap forward in the pursuit of the American aspiration: creating a corporate behemoth on par with European giants like LVMH Moët Hennessy Louis Vuitton or Kering. However, it’s important to note that the U.S. consortium remains a considerable distance from matching the financial prowess of these esteemed corporations. As a reference point, in the year 2022, Kering commanded sales of €20.35 billion, while LVMH achieved a staggering $79.2 billion.
Harkening back to earlier times, American fashion enterprises previously charted individual courses for portfolio expansion. Tapestry (formerly known as Coach Inc.) made waves with its $2.4 billion acquisition of Kate Spade in 2017, while Capri (formerly known as Michael Kors) secured its foothold in the luxury realm with a $1.2 billion investment in Jimmy Choo during the same year. The year 2018 saw Capri amass Versace for a substantial $2.12 billion. However, the crescendo of their union under the Tapestry banner stands resolutely as the most remarkable and pivotal move to date.
Envisioning the future, Tapestry, set to extend its operational reach across 75 countries with a workforce surpassing 33,000 dedicated professionals, is poised to reap the rewards of an estimated $200 million overhead reduction due to this transformative acquisition. The infusion of Versace and Jimmy Choo into the fold promises to fortify the conglomerate’s foothold within the upper echelons of luxury, while concurrently invigorating its accessible product offerings, exemplified by Coach and Michael Kors.