Tapestry acquires Versace owner for $8.5bn

The owner of Coach, Kate Spade and Stuart Weitzman, Tapestry Inc, has announced its acquisition of Capri Holdings, a global luxury fashion group that consists of Versace, Jimmy Choo and Michael Kors for approximately $8.5bn (£6.6bn). This acquisition brings together six “highly complementary” brands with global reach on Tapestry’s customer engagement platform and diversified, direct-to-consumer operating model. In addition, the combined company generated global annual sales in excess of $12bn (£9.4bn) with a presence in over 75 countries and achieved nearly $2bn (£1.5bn) in adjusted operating profit in the prior fiscal year. Joanne Crevoiserat, CEO of Tapestry, said: “Tapestry is an organisation with a passion for building enduring brands through superior design and craftsmanship and an unwavering focus on our customers. Importantly, we’ve created a dynamic, data-driven consumer engagement platform that has fueled our success, fostering innovation, agility, and strong financial results. “From this position of strength, we are ready to leverage our competitive advantages across a broader portfolio of brands” John Idol, chairman and CEO of Capri Holdings, said: “Today’s announcement marks a major milestone for Capri. It is a testament to all that our teams have achieved in building Versace, Jimmy Choo, and Michael Kors into the iconic and powerful luxury fashion houses they are today. “We are confident this combination will deliver immediate value to our shareholders. It will also provide new opportunities for our dedicated employees around the world as Capri becomes part of a larger and more diversified company.” Scott Roe, CFO and COO of Tapestry, added: “The acquisition of Capri Holdings accelerates our strategic agenda and represents a significant value creation opportunity. Importantly, this combination is immediately accretive on an adjusted basis and enhances Tapestry’s total shareholder return. This includes more than $200m (£157m) in expected run-rate cost synergies within three years of deal closing. “Further, our diversified, strong, and consistent cash flows will allow us to continue to invest in our business and rapidly pay down debt. Overall, we are disciplined financial operators and allocators of capital with a relentless drive to deliver meaningful shareholder value.”