Tapestry is acquiring Versace's parent company Capri for $8.5 billion
Tapestry, the US-based owner of luxury lifestyle brand Coach, has announced it is acquiring Capri, the parent company of Versace. The transaction will be worth $8.5 billion. The merger will create an American luxury fashion conglomerate that can rival the likes of European powerhouses LVMH and Kering. The acquisition "creates a new powerful luxury global house," said Tapestry CEO Joanne Crevoiserat.
The new entity will house 6 luxury brands
The unified company will house six major luxury brands. Tapestry owns Coach, Stuart Weitzman, and Kate Spade. Capri is the parent of Versace, Jimmy Choo, and Michael Kors. Tapestry is stronger in Asia, while Capri garners more sales in Europe. This merger allows Tapestry to adopt a strategy similar to European powerhouses focusing on a diverse portfolio of brands appealing to different segments.
The companies are aiming for $200mn in annual savings
The all-cash takeover aims to boost sales by integrating customer data streams, expanding geographic reach, and achieving $200 million in annual cost savings within three years of closing. Last year, the combined revenue of Tapestry and Capri was $12 billion, while LVMH reported $87 billion in revenue. However, Tapestry's direct-to-consumer business and Capri's legacy fame are expected to help them grow further.
