Tapestry Inc, a house of iconic accessories and lifestyle brands like Coach, Kate Spade and Stuart Weitzman, will acquire Capri Holdings, the global fashion luxury group consisting of Versace, Jimmy Choo and Michael Kors.
- The combined company generated global annual sales of over $12 billion with a presence in 75 countries and achieved nearly $2 billion in adjusted operating profit in the previus fiscal year.
- The transaction is not subject to a financing condition. Tapestry has secured $8.0 billion in fully committed bridge financing from Bank of America N.A. and Morgan Stanley Senior Funding, Inc. The purchase price of approximately $8.5 billion is expected to be funded by a combination of senior notes, term loans, and excess Tapestry cash, a portion of which will be used to pay certain of Capri’s existing outstanding debt.
- The formalities are expected to be concluded in calendar year 2024.
The Rationale: The acquisition of Capri Holdings builds on Tapestry’s core tenets as consumer-centric brand-builders and disciplined operators, accelerating its strategic and financial growth agenda. The combination:
- Extends global reach and geographic diversification given the Tapestry and Capri Holdings highly complementary respective positions in Asia and Europe.
- Broadens Tapestry’s product offering through an increased penetration of lifestyle categories, notably footwear and ready-to-wear, where Capri Holdings brings extensive expertise with further opportunity for growth.
- Expects to realise over $200 million in run-rate cost synergies within three years post-closing, supported by operating cost savings and supply chain efficiencies.
- Builds portfolio in durable, high-margin categories where Tapestry has best-in-class operational execution, enhancing strong and consistent cash flow.
- Brings together more than 33,000 passionate employees around the world with shared values of innovation, inclusivity, and creativity, providing new opportunities for internal career mobility and growth.
WHAT THEY SAID:
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. The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house, unlocking a unique opportunity to drive enhanced value for our consumers, employees, communities, and shareholders around the world.
— Joanne Crevoiserat
Chief Executive Officer
Tapestry Inc
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. 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.
— John D Idol
Chairman and Chief Executive Officer
Capri Holdings Limited
