An $8.5 billion deal sealed this week is likely to see a sign of consolidation in the fashion market with the creation of a powerful new global luxury fashion house commanding $12 billion in revenue
Coach & Versace Team Up
Tapestry, which owns Coach and Kate Spade, bought Capri Holdings, the parent company of Versace and Michael Kors.
Capri shareholders received $57 per share in cash.
The amalgamation is being seen as a partnership between two luxury brands joining forces in the high-end retail market in search of growth. There are fears that US consumers are pulling back on spending as the economy gets tougher.
Jimmy Choo Too
The word is that this weakening demand has put pressure on both brand houses to seek new markets further afield. These international plans will be more secure with more brands, more resources and economies of scale.
The new grouping certainly has brand power. It commands six brands including Jimmy Choo and Stuart Weitzman.
Worldwide Expansion is On The Cards
Tapestry hopes the acquisition will help expansion in Europe, the Middle East and Africa. The deal will also offer Capri’s brands more exposure in Asia, the New York Times reported, as well as greater resources.
The deal will also cut costs and the economies of scale in the supply chain are expected to save the companies $200 million over the next three years.
The chief executives of both countries say the deal will bring their handbags, shoes and apparel closer to consumers in 75 countries.
