Tapestry Inc., Parent Company of Coach to Acquire Capri Holdings Limited, Home of Direct Competitor Michael Kors

Tapestry, who currently own Coach, Stuart Weitzman and Kate Spade New York, are set to purchase Capri, the owners of Michael Kors, Versace and Jimmy Choo, in a deal worth $8.5 billion. Tapestry will be paying $57 per share in cash – this is 65% more than the $51.83 that Capri’s shares were worth in premarket trading.^[1]

Who are Tapestry and Capri, and how did they become the multibrand companies that they are today?

Featured image (l-r): Coach SS2023,^[2] Versace SS2023,^[2] Jimmy Choo SS2023 ad campaign,^[3] Michael Kors Collection SS2023,^[2] Kate Spade New York SS2023^[2].

Who is Tapestry, Inc., formerly known as Coach, Inc.?

Coach was founded in New York in 1941 by six artisans, hand-crafting leather into practical items.^[4] In 1946, Lillian and Miles Cahn joined the group, eventually taking over the company.^[5]

In 1962, Miles Cahn hired Bonnie Cashin to be Coach’s first lead designer, and her vision transformed the brand to reflect the spirit of 1960s New York.^[4] The image shows one of her designs from 1969.^[6]

A store in Madison Avenue followed, and as the company grew it was later renamed to Coach, Inc. (NYSE: COH) in 2000 upon its IPO.^[7] Today Coach is led by creative director Stuart Vevers, and in his Resort 2024 collection, Vevers paid tribute to the brand’s heritage and Cashin’s animal prints with leopard print bags and apparel^[8].

Who are Tapestry, Inc.’s brands?

In January 2015, Coach, Inc. signed an agreement with private equity firm Sycamore Partners to acquire Stuart Weitzman Holdings LLC,^[9] with the deal completed that May.^[10]

Coach, Inc. paid approximately $530 million in cash to Sycamore Partners, with up to $44 million in further payments dependent upon the successful achievement of certain revenue targets over the next three years.^[10]

In May 2017, Coach, Inc. announched it had made an agreement to acquire Kate Spade & Company^[11] (NYSE: KATE), for $18.50 per share (a total of $2.4 billion), with the purchase completed two months later.^[12]

On October 31st 2017, the company rebranded to Tapestry, Inc. (NYSE: TPR). Of the name change, Victor Luis, CEO of Coach, Inc. at the time said, “In Tapestry, we found a name that speaks to creativity, craftsmanship, authenticity and inclusivity on a shared platform and values.”^[13]

Who is Capri Holdings Limited, formerly known as Michael Kors Holdings Limited?

In 1981 Michael Kors founded Michael Kors Holdings Limited. The company initially went public (NYSE: KORS)^[14] with an IPO in December 2011 and by March 2012 stock prices had almost doubled.^[15]

Today Kors’ brand produces items under a number of labels including Michael Kors Collection and MICHAEL Michael Kors.^[16]

From 1997 to 2004, Kors had been creative director of Céline, though he left to focus on his own brands.^[16]

Who are Capri Holdings Limited’s brands?

In July 2017, Michael Kors Holdings Limited announced it was to acquire Jimmy Choo for close to $1.2 billion,^[17] with the deal closing in November of that year.^[18]

The following year, in September 2018, an announcement was made that KORS was to acquire Italian brand Versace for over $2.1 billion with the purchase completed three months later, in December.^[19]

Similar to Tapestry, Inc., the group was renamed following the acquisition of other brands – in January 2019 following the purchase of Versace, Michael Kors Holdings Limited became Capri Holdings Limited (NYSE: CPRI).^[20]

Speaking about the change, Chairman and CEO John D. Idol noted that the name was inspired by the glamorous Italian island of Capri, which he said was “symbolic of the timeless heritage and strong foundation that is at the core of each of the three founder-led brands.”^[21]

Tapestry, Inc. will now house the following six brands (arranged alphabetically) once the acquisition of Capri Holdings Limited is complete:

Coach
Founded: 1941
Creative Director: Stuart Vevers
CEO & Brand President: Todd Kahn
Net Sales: $4.9 billion
Directly Operated Stores: 945
Employees: 10,800

Information source: [23]

Jimmy Choo
Founded: 1996
Creative Director: Sandra Choi
CEO: Hannah Colman
Net Sales: $613 million
Full Price Retail Stores: 182
Employees: 1,800

Information sources: [25, 26, 27, 28]

Kate Spade New York
Founded: 1993
Head Designers: Tom Mora, Jennifer Lyu
CEO & Brand President: Liz Fraser
Net Sales: $1.4 billion
Directly Operated Stores: 398
Employees: 4,500

Information source: [23, 30]

Michael Kors
Founded: 1981
Creative Director: Michael Kors
CEO: Cedric Wilmotte
Net Sales: $3.95 billion
Full Price Retail Stores: 508
Employees: 14,600

Information source: [20, 31, 32, 33, 34]

Stuart Weitzman
Founded: 1986
Head of Design: Edmundo Castillo
CEO & Brand President: Giorgio Sarné
Net Sales: $317 million
Directly Operated Stores: 100
Employees: 800

Information source: [23, 36]

Versace
Founded: 1978
Creative Director: Donatella Versace
CEO: Jonathan Akeroyd
Net Sales: $1.08 billion
Directly Operated Stores: 200+
Employees: 1,500

Information source: [38, 39, 40]

The future, and comparisons to LVMH and Kering

Interestingly for the deal, Coach and Michael Kors are considered to be direct competitors.^[42] Following the announcement, Tapestry is now being compared to European multibrand companies LVMH and Kering.^[43]

LVMH currently owns 75 brands including Fendi, Celine, Givenchy, and Loewe.^[44] Kering’s brand list includes Gucci, Bottega Veneta, Saint Laurent, and Alexander McQueen.^[45]

What do you think? Will Tapestry now be a threat to LVMH and Kering?

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