On the 10th of this month, Tapestry, Inc., owner of brands such as Coach, Kate Spade, and Stuart Weitzman, made headlines when it announced that it would acquire Capri Holdings, owner of fashion brands such as Michael Kors, Versace, and Jimmy Choo, for approximately $8.5 billion.
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,”
The merger will give Tapestry a group with annual global sales in excess of $12 billion, adjusted operating income of nearly $2 billion, and brands operating in more than 75 countries. The company also expects to reduce costs by approximately $200 million within three years and plans to finance the majority of the acquisition with debt.
By owning several well-known brands, the company is trying to compete with giant luxury conglomerates such as LVMH, Kering, and Richemont in Europe.
Related Article: Coach parent company Tapestry Acquires Michael Kors, Versace, and Jimmy Choo for $8.5 Billion
To begin with, Tapestry’s beginnings can be traced back to Coach, which was founded in 1941. At the time of its founding, Coach was a small, family-run wallet-making workshop on West 34th Street in New York City.
In 1961, the company was acquired by Miles and Lillian Cahn and rebranded as the Coach Leatherware Company. At the same time, at the suggestion of Mrs. Kahn, the company evolved from a purse workshop to a handbag manufacturer, and Coach’s first handbag line was introduced. These are the origins of the North American fashion conglomerate Tapestry, Inc.
This article chronicles the events that led Tapestry and Capri Holdings to become the multifaceted player it is today.
【Tapestry, Inc.】
In 1985- Coach
Sara Lee Corporation acquired Coach for $30 million. Under the umbrella of Sara Lee’s apparel and retail divisions, Coach expanded its global retail footprint and expanded into a wide range of accessories, including perfume, sunglasses, and jewelry.
In 2000- Coach
Sara Lee Corporation sold a minority stake in Coach in an initial public offering on the New York Stock Exchange on October 4, 2000.
In furtherance of a larger plan to concentrate its holdings in food and beverages, underwear, and housewares, Sara Lee sold its remaining stake in Coach through a split-off initiated in March 2001, making good on its promise to shed its 83 percent stake in the leather goods company within a year of the IPO.
In 2015- Stuart Weitzman
In May 2015, Coach Inc. acquired Stuart Weitzman from private equity firm Sycamore Partners for $574 million. At closing, the company stated that it “made an initial cash payment of approximately $530 million to Sycamore Partners,” adding that it would make “contingent payments of up to $44 million to Sycamore Partners if it achieves certain revenue targets within three years following the closing of the acquisition.”
In 2017- Kate Spade & Company
In July 2017, Coach Inc. completed its acquisition of Kate Spade & Co. the womenswear brand formerly traded on the New York Stock Exchange, for $18.50 per share in cash, bringing the total transaction value to $2.4 billion. The merger of Coach and Kate Spade & Co. created a luxury lifestyle company.
In October, 2017- Tapestry, Inc.
In October 2017, Coach Inc. changed its name to Tapestry, Inc. to reflect the growing number of brands under its umbrella.
【Capri Holdings】
In 1981- Michael Kors
Fashion designer Michael Kors launches his eponymous American luxury sportswear brand in New York.
In 2011- Michael Kors
On December 15, 2011, Michael Kors set an American record with the largest IPO in American fashion history. The IPO took place on the New York Stock Exchange, where Michael Kors went public with 47.2 million shares (trading under “KORS”) and raised $944 million.
In November,2017- Jimmy Choo
In November 2017, Michael Kors acquired Jimmy Choo. Under the terms of the deal, London-based Jimmy Choo shareholders received 230 pence per share, for a total transaction value of approximately $1.35 billion. In a statement at the time, Michael Kors Holdings described the “strategic rationale” for the acquisition as the potential to increase Jimmy Choo’s sales to $1 billion and to establish a strong presence in the market by diversifying its product line while maintaining a balanced portfolio. The company further cited the development in the men’s luxury footwear and luxury accessories sectors, and further expansion into global markets, especially the fast-growing Asian market.
In 2018- Versace
On December 31, 2018, Michael Kors acquired Versace for a total enterprise value of €1.83 billion (approximately $2.12 billion as of the announcement date). Concurrent with the closing, the Versace family reinvested a total of €150 million of the cash received for its interest in Versace in exchange for approximately 2.4 million common shares.
Michael Kors stated that the Versace acquisition is expected to bring a number of benefits. This included growing Versace’s revenues to $2 billion and helping to expand the group’s overall revenues to $8 billion over the long term. the company also stated that the company’s growth in Asia would broaden its geographic revenue base and potentially create additional operational synergies.
In 2019- Capri Holdings
Michael Kors Holdings Limited changed its name to Capri Holdings to reflect its new status as a multi-brand fashion group upon the closing of the Versace transaction. The company announced that it began trading on the New York Stock Exchange under the ticker CPRI on January 2, 2019.