Coach’s parent company, Tapestry, has announced its plans to acquire Capri Holdings, the owner of Michael Kors, in a deal valued at $8.5 billion. This move aims to create a leading U.S. fashion conglomerate that can better compete with larger European counterparts in the global luxury market.
Under the terms of the deal, Tapestry will pay Capri shareholders $57 per share in cash, totaling around $6.69 billion, representing a premium of nearly 65% over Capri’s share price before the announcement. The merger will bring together Tapestry’s brands, which include Kate Spade and Stuart Weitzman, with Capri’s Jimmy Choo and Versace labels.
U.S. luxury companies have historically lagged behind their European counterparts, such as LVMH, which owns renowned brands like Louis Vuitton and Dior. This acquisition is seen as a response to a potential slowdown in demand for luxury goods in the U.S. after a surge following the pandemic, as inflationary pressures lead customers to reduce discretionary spending.
The merger is expected to provide both Tapestry and Capri with increased resources and capabilities to expand their global reach and bolster growth. Both companies have previously grown through acquisitions: Tapestry acquired Kate Spade and Capri acquired Jimmy Choo and Versace.
This acquisition could signal a resurgence of deal-making in the U.S. luxury sector, a trend that European luxury giants like Kering and LVMH have been actively pursuing by acquiring high-end brands. The deal is subject to regulatory and shareholder approval.
