Versace and Jimmy Choo for sale: Capri Holdings’ strategy to save Michael Kors

Capri Holdings considers selling Versace and Jimmy Choo to revitalise Michael Kors following the blocked merger with Tapestry Inc.

After the US antitrust authorities blocked the merger of Capri Holdings with Tapestry Inc., Capri Holdings is exploring the sale of its luxury brands Versace and Jimmy Choo. This strategy aims to concentrate resources on revitalising Michael Kors, its flagship brand, which has seen a decline in valuation from $4.71 billion in 2016 to $3.52 billion in 2024.

Versace, acquired by Capri in 2019 for $2.1 billion, has experienced fluctuations in revenue, reaching $1.1 billion in 2023 before declining to $1.03 billion in 2024. Jimmy Choo, purchased in 2017 for $1.2 billion, has maintained average sales of around $600 million since 2019.

The potential sale of these brands would allow Capri Holdings to focus on strengthening Michael Kors, which has suffered a 22% drop in valuation since 2019. Analysts suggest that by divesting Versace and Jimmy Choo, Capri could reinvest in Michael Kors to regain its position in the accessible fashion market.

Shifting consumer trends and the rise of the second-hand market have put pressure on traditional brands to adapt quickly. Selling Versace and Jimmy Choo could represent a significant strategic shift for Capri Holdings, enabling it to redefine its strategy in a highly competitive and dynamic global landscape.