Two of America’s biggest fashion companies are joining forces.
Tapestry Inc., the luxury conglomerate headquartered in New York City, has announced its plans to acquire competitor Capri Holdings. According to the Associated Press, the $8.5 billion deal will bring together six powerhouse labels: Coach, Kate Spade, and Stuart Weitzman (all of which were owned by Tapestry) as well as the Capri-owned Versace, Michael Kors, and Jimmy Choo. The fashion companies will soon operate under the Tapestry umbrella.
The conglomerates announced the acquisition Thursday, shortly after their respective boards approved the merger. The AP reports that the deal still needs approval from Capri’s shareholders, but will likely be finalized in 2024.
“Tapestry is an organization with a passion for building enduring brands through superior design and craftsmanship and an unwavering focus on our customers,” Tapestry CEO Joanne Crevoiserat said in a press release. “The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house, unlocking a unique opportunity to drive enhanced value for our consumers, employees, communities, and shareholders around the world.”
Tapestry and Capri reportedly account for $12 billion in revenue, combined, in more than 75 countries. The deal is expected to generate about $200 million in cost synergies within three years. According to the AP, Capri’s stock increased from $19.35 to $53.96 on Thursday, while shares of Tapestry fell 12 percent, to $36.38. The former’s shareholders will receive $57 per share in cash.
Executives for both companies said the deal will help Tapestry become a stronger competitor to fashion giants like Kering and LVMH Moët Hennessy Louis Vuitton. Once the acquisition is completed, Tapestry will become the fourt-largest luxury company in the world and the second-largest in North America, behind LVMH.
“Today’s announcement marks a major milestone for Capri,” said John D. Idol, Capri chairman and CEO. “We are confident this combination will deliver immediate value to our shareholders. It will also provide new opportunities for our dedicated employees around the world as Capri becomes part of a larger and more diversified company. By joining with Tapestry, we will have greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands.”
