Capri Holdings’s sales dropped 16.4 per cent to $1.08 billion in the second quarter of 2025, ended 28 September.
In August 2023, rival Tapestry (owner of Coach, Kate Spade and Stuart Weitzman) announced its intention to acquire Capri in an $8.5 billion deal, creating an all-American conglomerate. However, in April, the Federal Trade Commission (FTC) sued to block the merger stating that the deal would give the combined company a dominant share of the “accessible luxury” handbag market. Tapestry and Capri’s appeal was rejected in October, and although the companies have appealed since, it’s looking like the deal is off the table for now.
Tapestry, which reported its Q2 earnings on Thursday, beat expectations with sales in line with the same period a year prior, and nudged up its outlook for 2025.
Due to the merger being blocked, Capri declined to provide financial guidance for the full year or host a conference call. “Overall, we were disappointed with our second-quarter results as performance continued to be impacted by softening demand globally for fashion luxury goods,” chairman and CEO John Idol said in a statement.
Gross profit fell 16.6 per cent to $694 million in Q2 as Capri’s margins were squeezed. Its net income dropped 73.3 per cent to $24 million.
By brand, Michael Kors’s revenues dropped 15.9 per cent year-on-year to $738 million, with the Americas declining 12 per cent, EMEA down 15 per cent and Asia down 43 per cent. Versace’s revenues declined 28.2 per cent to $201 million, with the Americas down 33 per cent, EMEA down 28 per cent and Asia dropping 20 per cent. Jimmy Choo’s revenues returned to growth, increasing 6.1 per cent to $140 million, with the Americas down 8 per cent, EMEA increasing 25 per cent and Asia down 8 per cent.
“Capri reported a fifth consecutive period of disappointing results since announcing the definitive agreement to be acquired by Tapestry, with both revenue and earnings falling well short of expectations,” said Dana Telsey, CEO and founder of research and consultancy firm Telsey Advisory Group, in a note. “The company has lost over a year to take significant strategic steps to revitalise Michael Kors or to improve profitability at its Jimmy Choo and Versace banners, perhaps falling further behind in its ability to better position its brands competitively in the marketplace.”
Idol said: “Despite the challenging global retail environment, we remain focused on executing our strategic initiatives to deliver long-term sustainable growth across all three of our luxury houses.”
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