Capri Recalibrates Strategy, Prioritizing Michael Kors After Versace Divestment

Capri Holdings makes a move just hours after finally closing the sale of Versace to Prada for $1.4 billion. The transaction leaves the group without the brand with which it wanted to attack the luxury universe in 2018, when it integrated Versace for $2.1 billion along with Michael Kors and Jimmy Choo, and means, according to John Idol, a turning point for the company.

The CEO took the floor at a Morgan Stanley conference in New York, where he defended that the divestment is a very important event because it returns to the group a financial flexibility that it did not have and reduces debt to minimum levels. For the executive, Capri’s future lies in strengthening the two businesses it retains.

Jimmy Choo, despite having been on the radar of possible sales according to market sources, is not for sale, Idol stressed. The executive said that the brand can add another $200 million in sales and approach $800 million in the next few years.

The big bet is Michael Kors, the brand that Idol has known first-hand since 2003 and which became the group’s driving force before going through several difficult years. The executive admitted that part of that weakness came from an internal transformation that was a mistake and led the brand to move away from its original identity.

Capri Holdings to focus its efforts on Michael Kors after divesting Versace

The company is returning to the original codes, the jet set imagery that defined Michael Kors and is now updated with a contemporary reading of aspirational travel. Idol explained that the brand is working on campaigns centered on a narrative that connects with the idea of disconnecting, moving or simply changing scenery.

The push is not just coming from marketing; Michael Kors has reordered its pricing architecture, raising prices in outlets and lowering them in the regular channel to gain traction at full price. It has also continued to adjust its retail network, with 125 closures in three years. The group now maintains some 700 stores and is preparing new openings after completing renovations and rethinking product.

The U.S. retail giant closed the first six months of the year (period ended September 27th) with a turnover of $1.653 billion, down 4.06% from a year earlier. Despite the drop in sales, the decline was slightly less than in the first quarter, when Capri sold 6% less. The company’s gross profit, meanwhile, stood at $1.024 billion, 5.3% less than in the first six months of 2024.