Tapestry, the parent company of Coach, is acquiring Capri Holdings, which owns fashion brands such as Michael Kors, Versace, and Jimmy Choo. The purchase price is approximately $8.5 billion.
The U.S. fashion house is trying to challenge giant European conglomerates such as LVMH and Kering by acquiring a number of well-known brands and holding them under its umbrella.
Tapestry announced that the combined company will have annual global sales in excess of $12 billion and operations in more than 75 countries. The company also expects to save approximately $200 million in costs over the next three years as a result of the merger and plans to finance the majority of the acquisition with debt.
Joanne Crevoiserat, CEO of Tapestry, said in a statement, “The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house,”
Capri Chairman and CEO John Idol said, “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,”
Kering announced last month that it would purchase a stake in Valentino from Qatari investment firm Mayhora for 1.7 billion euros, bringing another big fashion brand under its umbrella. Under the deal, Kering, which owns Gucci, has the option to buy 100% of Valentino by 2028. The company also attempted to acquire Tom Ford last year, however, lost out to cosmetics giant Estée Lauder after a fierce bidding war, with Estée Lauder paying more than $2 billion for Tom Ford.
Meanwhile, LVMH acquired New York-based luxury jewelry brand Tiffany & Co. in 2021, and at this point controls about 60 subsidiaries and manages 75 well-known brands.
Tapestry and Capri’s boards have approved the deal, which is expected to close next year. Capri’s stock price rose more than 58% before the market opened Thursday, while Tapestry’s fell 3%.