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Capri's financial outlook brightens with Michael Kors' support; Versace's sale potential further boosts Capri's prospects.

Capri Holdings, the American clothing behemoth, stands behind its brand portfolio...

Global style powerhouse Capri Holdings, encompassing its labels...
Global style powerhouse Capri Holdings, encompassing its labels...

Capri Holdings Shifts Tack in Strategic Overhaul

Capri's financial outlook brightens with Michael Kors' support; Versace's sale potential further boosts Capri's prospects.

Capri Holdings, the US-based fashion conglomerate that operates brands like Michael Kors, Jimmy Choo, and Versace, has reported a significant financial setback in its fiscal year 2024/25. The group's revenues dipped to 4.4 billion euros, down from 5.2 billion euros in the previous year, with an operating loss increasing to 752 million euros from -241 million euros.

Despite these challenges, the company is optimistic about the fiscal year 2026, expressing anticipation for a resurgence in growth. This optimism stems from a strategic pivot aimed at revitalizing its business.

In a move to strengthen its financial position, Capri Holdings has announced the sale of its Italian fashion house, Versace, to the Prada Group for around $1.375 billion. The proceeds from this sale are expected to significantly reduce the company's debt burden, paving the way for eventual resume of its share repurchase program.

Capri Holdings is focusing on its core brands, Michael Kors and Jimmy Choo, with ambitions to boost their performance. The company's goal is to raise Michael Kors' revenue to four billion dollars and Jimmy Choo's to 800 million dollars over time, while also raising the operating margin back into the double-digit range.

In the current fiscal year 2025/26, the group expects to generate revenue of 3.3 to 3.4 billion dollars without Versace, and an operating profit of around 100 million dollars. Michael Kors is projected to contribute 2.75 to 2.85 billion dollars to the group's revenue and achieve a high single-digit operating margin. For Jimmy Choo, the revenue target is set at 540 to 550 million dollars, with a mid-single-digit negative margin.

Capri Holdings

[Context: The Parenthetical statements (...) refer to sources of information. They are not cited in a traditional academic fashion, but are just used to provide a foundation for the statements made.]

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[Background: Capri Holdings, previously known as Michael Kors Holdings, was rebranded in 2018 upon acquiring Versace. The company owns a portfolio of luxury and premium lifestyle brands, including Jimmy Choo and Versace alongside Michael Kors.]

  1. In an attempt to improve its financial stability, Capri Holdings plans to reinvest the proceeds from the sale of Versace to the Prada Group, with the aim of resuming its share repurchase program and boosting the performance of its core brands, Michael Kors and Jimmy Choo.
  2. As part of its strategic overhaul, Capri Holdings aspires to raise Michael Kors' revenue to four billion dollars and Jimmy Choo's to 800 million dollars, while also aiming to increase the operating margin for both brands into the double-digit range, reflecting its focus on the lifestyle, fashion-and-beauty, and business sectors.

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