The fashion conglomerate Tapestry Inc., which owns brands like Coach, Kate Spade, and Stuart Weitzman, has announced its acquisition of Capri Holdings, the company that owns Michael Kors, Jimmy Choo, and Versace.
Tapestry will pay $57 in cash for each Capri share, which is 65% higher than the holding’s stock price at the close of trading on August 9th. The total value of the deal is approximately $8.5 billion.
Combined sales for the two American luxury conglomerates amounted to $12 billion last year. If the deal is completed, the merged company will operate under the Tapestry brand.
The decision to merge comes at a challenging time for luxury goods producers. Both companies have reported a decline in sales in the U.S. this year, attributed to Americans trying to save money amid high inflation. The leaders of Tapestry and Capri emphasized that bringing six brands under one roof will allow them to expand their consumer base while simultaneously increasing resources for production.
Following the announcement of the deal, Tapestry’s stock fell by 13.5%, while Capri’s stock, on the other hand, surged by over 56%.
