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Capri’s full-year revenues were down 8.4 per cent year-on-year to $5.17 billion from $5.6 billion in 2023.
“Overall, we were disappointed with our results as performance in the fourth quarter continued to be impacted by softening demand globally for fashion luxury goods,” John D Idol, chairman and CEO, said in a statement. “In our retail channel, sales trends improved sequentially in the Americas and EMEA (Europe, the Middle East and Africa), while trends slowed in Asia. In our wholesale channel, sales remained challenged.”
By brand, Michael Kors revenues were $3.5 billion versus $3.88 billion for 2023; Versace hit $1 billion versus approximately $1.1 billion; and Jimmy Choo revenues were $618 million versus $633 million.
These declines were bolstered by fourth-quarter dips across brands. Overall, revenues were down 8.4 per cent year-on-year to $1.2 billion. Michael Kors was down 9.7 per cent to $822 million; Versace was down 3.6 per cent to $264 million; and Jimmy Choo was down 9.3 per cent to $137 million.
It’s a particularly hard hit given the 2023 comparisons weren’t high to begin with, says Neil Saunders, managing director and retail analyst at Globaldata. “Given that Capri was up against a very weak prior year number, the 8.4 per cent decline in total revenue is disappointing. On a two-year stack, sales have now fallen by 18 per cent,” he says.
Saunders cautions against blaming weak consumer demand alone. “Such a rapid pace of deterioration cannot be blamed entirely on the softness in the luxury market as it is way in excess of the decompression seen across the wider sector. As such, Capri stands out as being one of the main underperformers in the premium space, something we attribute to poor management and a lack of discipline across its brands.”
The company, however, says brand equity remains strong, with consumer acquisition up 14 per cent year-on-year across all three brands. “Looking forward, we remain focused on executing our strategic initiatives to deliver long-term sustainable growth across each of our luxury houses,” Idol said.
The company did not offer any financial guidance, given its merger with Tapestry is still pending.
Idol addressed the FTC’s suit claiming that Tapestry’s acquisition of Capri would eliminate competition in the accessible luxury handbag space.
“We strongly disagree with the FTC’s decision and firmly believe in the merits of this acquisition. The market realities, which the government’s challenge ignores, overwhelmingly demonstrate that this transaction will not limit, reduce, or constrain competition. Tapestry and Capri operate in the fiercely competitive and highly fragmented global fashion luxury industry. Consumers have hundreds of handbag choices at every price point across all channels, and barriers to entry are low.”
Idol said that Capri plans to “vigorously defend” the case alongside Tapestry, and looks forward to the successful completion of the acquisition. No timeline was provided for the expected conclusion.
“By joining with Tapestry, our brands will have greater resources and capabilities to accelerate the expansion of their global reach while preserving their unique DNA,” Idol concluded. The merger is the best possible outcome for Capri, Saunders says. “This would put the brands under the control of a disciplined management team with a proven track record.”
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