Tapestry, Inc. Drops Plans to Acquire Capri Holding Ltd. After FTC Blocks Merger
The fashion world was buzzing on Thursday as Tapestry, Inc., the parent company of Coach and Kate Spade, announced that it would no longer be pursuing a merger with rival Capri Holding Ltd., which owns Michael Kors, Versace, and Jimmy Choo. The decision came after the US Federal Trade Commission successfully blocked the $8.5 billion USD deal, citing concerns about competition in the mid-tier handbag market.
The two conglomerates had previously stated their intention to appeal the court’s ruling, but ultimately decided to terminate the agreement as the legal proceedings would likely extend beyond the outside date of February 10, 2025. This move marks a significant setback in America’s efforts to create a powerhouse parent company similar to Europe’s LVMH or Kering.
While the merged American fashion group would have still trailed behind its European counterparts in terms of sales, the acquisition would have made significant strides towards this goal. In 2022, Kering reported sales of €20.35 billion EUR, and LVMH posted sales of €79.2 billion EUR. In comparison, Tapestry and Capri sit in very different financial standings, with Tapestry forecasting over $6.75 billion USD in revenue for the 2025 fiscal year and Capri seeing a 16.4% drop in revenue in the second quarter of the same year.
Tapestry’s CEO, Joanne Crevoiserat, remains optimistic about the company’s future, stating, “We have always had multiple paths to growth and our decision today clarifies the forward strategy. Building on our successful first quarter, we will move with speed and boldness to accelerate growth for our organic business. Tapestry remains in a position of strength, with distinctive brands, an agile platform, passionate teams, and robust cash flow.”
Meanwhile, Capri’s chairman and CEO, John D. Idol, is focused on the future of the company’s three luxury houses, Versace, Jimmy Choo, and Michael Kors. He stated, “Given our Company’s performance over the past 18 months, we have recently started to implement a number of strategic initiatives to return our luxury houses to growth. Across Versace, Jimmy Choo, and Michael Kors, we are focused on brand desirability through exciting communication, compelling product, and omni-channel consumer experience.”
