Tapestry Inc., a luxury conglomerate based in New York City, has revealed its intention to acquire Capri Holdings, a fellow fashion company, in an $8.5 billion deal. This merger will unite well-known brands such as Coach, Kate Spade, and Stuart Weitzman from Tapestry with Versace, Michael Kors, and Jimmy Choo from Capri Holdings. Following the merger, all these renowned fashion labels will operate under the Tapestry umbrella. The announcement of the acquisition comes after approval from the boards of both companies and is expected to be finalized in 2024, pending approval from Capri’s shareholders.
The combined revenue of Tapestry and Capri Holdings stands at approximately $12 billion, spread across more than 75 countries. The proposed deal is expected to result in around $200 million in cost synergies within a three-year period. As per reports, on the day of the announcement, Capri’s stock price surged from $19.35 to $53.96, whereas Tapestry’s shares experienced a 12 percent decline, falling to $36.38. Shareholders of Capri Holdings are set to receive $57 per share in cash.
Both companies’ executives have indicated that the acquisition will bolster Tapestry’s competitive position against fashion giants like Kering and LVMH Moët Hennessy Louis Vuitton. Upon the successful completion of the merger, Tapestry will become the fourth-largest luxury company globally and the second-largest in North America, following LVMH.