Tapestry Inc’s Acquisition of Capri Holdings Brands – A Strategic Leap in the Luxury Fashion Landscape. Story by RUNWAY MAGAZINE.

Unveiling a Majestic Merger in the World of Fashion Luxury

The fashion landscape is set to be redefined as two giants, Tapestry Inc. and Capri Holdings Limited, join forces to create a new pinnacle of luxury and style. On August 10, 2023, these industry titans announced a definitive agreement that will see Tapestry acquire Capri Holdings, setting the stage for a transformative journey into the realm of global iconic luxury and fashion brands.

In a move that will reshape the luxury fashion industry, Tapestry, Inc. has announced its definitive agreement to acquire Capri Holdings Limited, setting the stage for a new era in the global luxury and fashion domain. The acquisition, expected to close in calendar year 2024, unites six iconic brands under one roof, including Coach, Kate Spade, Stuart Weitzman, Versace, Jimmy Choo, and Michael Kors. This strategic amalgamation holds substantial financial significance and is poised to leverage synergies, diversify portfolios, and drive value across various fronts.

A Symphony of Brands

The merger promises to be a game-changer, uniting six exceptional brands under a single, powerful umbrella. The powerhouse of Tapestry’s Coach, Kate Spade, and Stuart Weitzman combines harmoniously with Capri Holdings’ Versace, Jimmy Choo, and Michael Kors. This fusion spans continents, transcends boundaries, and presents an exquisite mosaic of designs, craftsmanship, and heritage that will reshape the luxury fashion landscape.

Financial Prowess and Reach

The combined financial strength of the merged entities is nothing short of remarkable. The consolidated company boasted over $12 billion in revenue and nearly $2 billion in adjusted operating profit in the previous fiscal year. This robust financial foundation stems from Tapestry’s prowess in building enduring brands through innovation and craftsmanship, further bolstered by a data-driven consumer engagement platform.

Diversification and Global Reach

The strategic rationale behind the acquisition is clear – the marriage of these brands presents a diversified luxury powerhouse with immense global reach. With a presence in over 75 countries, the portfolio’s expansion across diverse consumer segments, geographies, and product categories is set to redefine luxury fashion consumption. The inclusion of Versace, Jimmy Choo, and Michael Kors bolsters Tapestry’s foothold in the lucrative $200+ billion global luxury market for handbags, accessories, footwear, and apparel.

A Vision of Synergy and Financial Efficiency

One of the standout financial aspects of this acquisition is the expected synergy value of over $200 million on a run-rate basis. The operational cost savings and supply chain efficiencies that will be realized within three years post-closing signify a well-calibrated financial integration. Such synergies not only enhance operational efficiency but also contribute significantly to the overall financial health of the merged entity.

Direct-to-Consumer and Data-Driven Approach

The story of this merger isn’t just about brand names and financials; it’s also about the promise of greater synergy and efficiency. Tapestry’s strength in data analytics and modern technology infrastructure will play a pivotal role in strengthening consumer engagement and deepening connections with the new portfolio of brands. Leveraging this platform to drive the Direct-to-Consumer model presents an enticing opportunity to tap into the evolving consumer preferences and behavior, thus opening new avenues for growth.

A Future of Fashion Innovation

Joanne Crevoiserat, the CEO of Tapestry, speaks passionately about the merger’s potential to drive innovation and growth. The merger presents a dynamic, data-driven consumer engagement platform, a true game-changer in fashion’s modern age. This platform, combined with the diverse portfolio of brands, promises to fuel innovation, agility, and remarkable financial results.

Walking the Talk of Values

Beyond numbers and products, the merger also underscores a shared commitment to purpose and people. More than 33,000 passionate employees globally are coming together under the umbrella of innovation, inclusivity, and creativity. This powerhouse envisions a future where progress is measured in terms of sustainability, equity, and inclusivity – values that are at the core of their mission.

A Date with Destiny

The deal, approved unanimously by both companies’ boards of directors, is projected to close in the calendar year 2024, pending shareholder and regulatory approval. The all-cash offer of $57.00 per share, a premium of approximately 59% over the 30-day average ending on August 9, 2023, reflects the commitment to creating value in this merger.

A World of Luxury Unveiled

As fashion enthusiasts eagerly await the realization of this merger, one thing is clear – Tapestry Inc.’s acquisition of Capri Holdings promises to be more than just a business deal. It’s a union of luxury, style, innovation, and values. This new global fashion powerhouse will undoubtedly weave a captivating tapestry that will redefine the future of fashion luxury.

Press-release

Conclusion

Tapestry’s acquisition of Capri Holdings and its prestigious brands marks a transformative milestone in the luxury fashion landscape facing LVMH. The combined strengths of these iconic brands are set to unlock new dimensions of growth, diversification, and financial efficiency. With its strategic synergies, data-driven engagement, and a clear commitment to financial prudence and sustainability, Tapestry’s acquisition of Capri Holdings resonates as a defining moment in luxury fashion’s evolution.