(News Bulletin 247) – Major maneuvers are continuing in the luxury industry. Coach’s parent company is going to buy Capri, owner of the Michael Kors, Versace and Jimmy Choo brands, in order to challenge the European giants in the sector.
The American groups intend to weigh well in the world luxury landscape, currently dominated by the European giants. To be more audible, the wedding box is therefore a solution. This is the path that was chosen by Tapestry, the group behind Coach and Capri, owner of the brands Michael Kors, Versace or Jimmy Choo, who announced their merger on Thursday.
The transaction is valued at 8.5 billion dollars, or 7.7 billion euros, with a view to creating a major player in the luxury sector and thus trying to titillate the European houses LVMH, Hermes, Kering or Richemont…
“Weakening demand has put pressure on Tapestry and Capri, who are now looking to international markets to support their growth. There is more security in embarking on bold international ventures together,” said Neil Saunders, managing director of GlobalData, to Reuters.
In the shadow of European giants
On the stock market, Tapestry and Capri still remain confidential players compared to the giants of the Old Continent. Before the announcement of this merger, the parent company of Coach had a market capitalization of 8 billion dollars (7.28 billion euros) when that of the owner of the brands Michael Kors and Versace was 4.35 billion dollars. (3.96 billion euros. Cumulatively, these two groups weigh less than 13 billion dollars (11.84 billion euros), far from Richemont and its 86 billion dollars (78 billion euros) on the stock market or Kering (70 billion dollars, or 64 billion euros).
Above all, these two groups are struggling to compete with Hermès, which still weighs 230 billion dollars on the stock market (210 billion euros) when LVMH, the leading listed group in Europe, has a capitalization of 455 billion dollars (415 billion euros) .
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