Capri Holdings Accelerates Financial Restructuring Through the Sale of Versace

On February 3, Capri Holdings Limited announced its results for the third quarter of fiscal year 2026, revealing that while headwinds persisted on the revenue front, the company has significantly strengthened its financial foundation through the sale of Versace.

Revenue for the quarter totaled $1.03 billion, representing a 4% year-on-year decline on a reported basis. The figures reflect an ongoing challenging business environment, as the global slowdown in consumer spending and continued restraint in discretionary purchases weigh on performance.

At the same time, the company’s balance sheet showed a marked improvement in the latest quarter. Through the sale of Versace to Prada Group, Capri Holdings reduced its net debt to $80 million. This represents a dramatic improvement compared with the net debt of $1.17 billion as of December 28, 2024.

Even amid declining revenue, the sharp reduction in leverage has fundamentally reshaped the company’s financial position. In an environment where interest-rate uncertainty remains elevated, the ability to mitigate financial risk and enhance cash-flow flexibility carries significant implications for long-term corporate value.

The divestment of Versace is not merely an asset disposal but a management decision that underscores Capri Holdings’ broader strategy of focus and selectivity. The company is now positioning Michael Kors and Jimmy Choo as its core brands, reallocating management resources accordingly. By shifting away from a conglomerate structure encompassing multiple luxury labels toward a more concentrated portfolio where it can exercise clear competitive strengths, Capri aims to improve operational efficiency and its earnings structure.

While revenue challenges persisted in the third quarter of fiscal 2026, the period can be characterized as one in which the groundwork for the company’s next growth phase was established from a financial perspective. How Capri Holdings will deploy the strategic flexibility gained through debt reduction—whether toward brand reinforcement or growth investment—will be the key focus going forward.