Towards the creation of a new luxury giant. The American group Tapestry, owner of the Coach, Kate Spade and Stuart Weitzman brands, announced on Thursday August 10 the signing of a definitive acquisition agreement with Capri, parent company of Michael Kors, Versace and Jimmy Choo, relating to a enterprise value of $8.5 billion.
This merger, which notably requires the green light from Capri’s shareholders and the regulatory authorities, should give birth to a luxury giant with a cumulative turnover of more than 12 billion dollars and a presence in 75 countries. Completion is expected in 2024.
The potential acquisition of Capri marks a resumption of luxury operations in the United States, while large European groups continue to expand their portfolios by taking over high-end brands.
“A new powerful and global luxury house”
“The combination of Coach, Kate Spade, and Stuart Weitzman with Versace, Jimmy Choo and Michael Kors creates a powerful new global luxury house, offering a unique opportunity to deliver greater value to our customers, employees, environments and shareholders at around the world”, commented Joanne Crevoiserat, boss of Tapestry, quoted in a press release. John Idol, boss of Capri, noted that by joining Tapestry “we will have greater resources and capabilities to accelerate our internationalization while preserving the unique DNA of our brands”.
The transaction, funded entirely in cash by Tapestry with a proposed price per share of $57 (+59% over the average price of the last 30 days), will have an “immediate” positive effect on adjusted net earnings per share, has specified the group. He pointed out that the two companies were “very complementary” in terms of geographical distribution, with one having a greater presence in Asia and the other having a greater presence in Europe. The new entity will employ more than 33,000 people. They expect to generate more than $200 million in cost synergies within three years of finalizing their union.