Capri Holdings-Tapestry: the merger between the American bigwigs officially skips. The Versace knot

After the recent halt to the deal imposed by a New York Federal Court judge to avert the risk of monopoly, the merger between Capri Holdings (Michael Kors, Versace and Jimmy Choo) and the Tapestry Group (Coach, Kate Spade and Stuart Weitzman) has finally been scrapped. A deal that was announced in summer 2023 and was worth $8.5 billion.

The two players mutually terminated the merger agreement, in the best interest of both companies. In fact, the merger agreement's deadline (10 February, ed.) was getting closer and closer, and it was unlikely that the deal would have received the required US regulatory approvals by then.

"With the resolution of the merger agreement, we are now focusing on the future of Capri and our three iconic luxury maisons," said John D. Idol, president and CEO of Capri Holdings, in a note. The manager said he was 'confident in Capri's long-term growth potential for several reasons. First, we have an incredible portfolio of luxury fashion houses, each with its own rich tradition, exclusive DNA and strong consumer loyalty. Secondly, we have a solid distribution network to build on. With over 1,200 directly operated luxury outlets globally, combined with our strong digital platform, we have a solid framework for the future. In addition, our extensive wholesale network serves as an important channel to reach consumers in areas where we do not have our own shops. Third, we have the management team, design talent and a global workforce of 15,000 employees to successfully execute our initiatives. Fourth, we have the financial strength to implement our strategies".

The operation had had a complex set-up, the penultimate chapter of which, on 25 October last, had seen the federal court in Manhattan block the deal (already approved in Europe) due to the risk of monopoly. The two groups, in fact, according to judge Jennifer Rochon, would both position themselves in "accessible luxury" (which includes the two flagship brands: Coach and Micheal Kors, ed.) concentrating in a single conglomerate 59% of this market segment:" the two merging players are close competitors and the operation would result in a loss of direct competition", Rochon had written in the ruling. The decision had come at the end of a procedure triggered by the Federal Trade Commission (Ftc), the American competition authority that had taken legal action to prevent this merger, which was destined to create a fashion giant..

Capri Holdings ended Q2 FY2025 with revenues of $1.08 billion, down 16.4% at both current and constant exchange rates. Broadening the focus to the first half of the year, total revenues were $2.14 billion, down 15% from $2.5 billion a year earlier. On the profitability side, Capri Holdings recorded a net profit of $24m for the quarter, compared to $90m in Q2 2024. Adjusted net profit, on the other hand, amounted to $77m, up from $133m in Q2 last year.