Capri Holdings, the owner of Michael Kors, Versace, and Jimmy Choo, saw a significant surge in its stock ahead of the market open on Thursday. This surge comes as its rival Tapestry, known for its Coach brand, is reportedly nearing a deal to acquire the global luxury fashion group. With this potential merger, the combined company would be in a better position to compete with industry giants such as LVMH Moët Hennessy Louis Vuitton and Gucci parent company Kering.
According to The Wall Street Journal and their sources familiar with the matter, the deal could be announced as early as Thursday.
Capri Holdings had initially scheduled to release its fiscal first-quarter earnings on Tuesday but rescheduled with only a day’s notice to Thursday at 6:45 a.m. Eastern time.
As of Wednesday’s close, Capri’s stock has experienced a 39% decline this year. However, it experienced a substantial surge of 21.7% in premarket trading on Thursday. On the other hand, Tapestry’s stock, which has seen an 8.3% climb so far in 2023, remained flat.
The luxury fashion industry has witnessed several notable deals in recent years, including LVMH’s acquisition of Tiffany & Co. in 2021. Tiffany played a crucial role in contributing to the 10% profit growth in LVMH’s Watches & Jewelry segment during the first half of 2023. This information was shared by LVMH during their earnings report last month.
Meanwhile, European fashion group Kering also made headlines when it announced the acquisition of a 30% stake in Italian luxury fashion house Valentino for 1.7 billion euros ($1.87 billion) in July. The deal includes an option to acquire 100% of Valentino by 2028.
Overall, this potential merger between Capri Holdings and Tapestry has generated significant interest in the fashion industry. Investors and analysts eagerly await further developments in the coming days.