The acquisition created a multi-brand luxurious powerhouse made up of Michael Kors jet-set way of life attire and designer luggage, the long-lasting Jimmy Choo footwear model, plus the red-carpet glamour of Versace. Donatella Versace herself, who stepped as much as lead after her brother Gianni’s tragic loss of life in 1997, was in place because the inventive visionary and mentioned she was “excited” in regards to the long-term prospects for the model her brother based in Milan in 1978. The nouveau American style conglomerate was poised to rival European rivals like Louis Vuitton and Hermes proprietor LVMH and Gucci proprietor Kering—with hovering revenues as well.
“We believe that the strength of the Michael Kors and Jimmy Choo brands, and the acquisition of Versace, position us to deliver multiple years of revenue and earnings growth,” mentioned CEO and Chairman John D. Idol. “I am thrilled to have the opportunity to work with Donatella on Versace’s next chapter of growth.”
After the acquisition, the corporate renamed itself Capri Holdings after the placing three-rock formation that is among the most recognizable sights on the Italian billionaire playground island of Capri. The corporate focused revenues of $8 billion for the group, with Versace delivering $2 billion, Michael Kors behind $5 billion, and Jimmy Choo delivering $1 billion.
Seven years on, that imaginative and prescient is in tatters.
Capri has been in free fall. The corporate posted a $1.18 billion loss in fiscal 2025 and revenues have plummeted 21% from $5.6 billion to $4.4 billion throughout the previous two fiscal years. The crown jewel, its Michael Kors model which accounts for practically 70% of the corporate’s revenues, has bled $864 million in gross sales since 2023. In April 2025, Capri introduced it might promote Versace to Prada for $1.375 billion, a surprising loss after failing to capitalize on the tour de power of Donatella Versace, who stepped down as creative director to the brand new function of chief model ambassador in April 2025. In the meantime, the corporate’s struggles are unfolding towards the backdrop of a shrinking luxurious market and a slowdown in shopping for. (Capri declined to remark for this story.)
Simeon Siegel, senior managing director at Guggenheim Companions, mentioned Capri can also be dealing with off towards rival Tapestry, which has seen vital success with its Coach model. “Tapestry is the hero of retail and they have succeeded like no other with Coach,” mentioned Siegel, who notes that the remainder of the Tapestry portfolio, which incorporates Kate Spade and Stuart Weitzman, has lagged. Coach’s revenues inform the other story of Capri. In fiscal 2023, Coach noticed $4.96 billion in gross sales, which climbed to $5.1 billion in 2024 and reached $5.6 billion in fiscal 2025.
‘Help!!! Fast!!!’
Idol has led the corporate within the twenty years because the Hong Kong personal fairness agency Sportswear Holdings—owned by Silas Chou and Lawrence Stroll—purchased a majority stake in Michael Kors in 2003 for about $100 million. Michael Kors’ development exploded from $20 million in gross sales in 2004 to roughly $3 billion a decade later. Idol added the chairman title in 2011, the identical 12 months the corporate went public, and he now reviews to an eight-member board with a median tenure of 9 years.
Michael Kors gross sales hit a peak in 2016 of about $4.7 billion, and has been roughly on the decline within the years since. In the meantime Idol has retained a good grip on the management function whilst two possible CEO candidates cycled by means of Capri. In August 2021, Capri introduced that it had employed Joshua Schulman to the newly created function of CEO of Michael Kors—after plucking him from his earlier function as CEO of Coach at Tapestry. (Schulman additionally served a earlier stint as CEO of Jimmy Choo, earlier than Capri purchased it in 2017.) Schulman was set to ease in as CEO of Michael Kors earlier than fully succeeding Idol in September 2022 as CEO of Capri, with Idol transferring as much as function government chair. Idol instructed traders he would give attention to long-term technique, future potential luxurious acquisitions, and board management as government chair.
It wasn’t to be. Seven months later, Capri introduced that Schulman was out, though Schulman nonetheless collected roughly $8 million in funds for contractually assured wage and bonus. Capri additionally lowered his non-compete settlement to a six-month interval. Idol stayed on as chairman and CEO, in accordance with a March 7, 2022 announcement. In January 2023, Capri introduced it had employed Cedric Wilmotte to function CEO of Michael Kors—solely to announce his departure in November 2024. That point, the board didn’t announce a succession plan—solely that Wilmotte would lead Michael Kors. Schulman is now CEO at Burberry and Wilmotte is an unbiased investor. Neither responded to requests for remark.
Solely two new administrators have joined the Capri board up to now 5 years, a technique marketing consultant who now chairs the audit committee, and the CEO of Bacardi Worldwide. Idol has stayed away from podcasts or long-form discussions, though he made an exception in 2013 on the McDonough Faculty of Enterprise at Georgetown College when his daughter attended. Nevertheless, Idol seems smiling in images alongside style fashions, actresses, Method 1 drivers and different celebrities at style exhibits and occasions.
If Coach-owner Tapestry is the hero, that makes Capri both the underdog or the damsel in misery, mentioned Siegel. “The company needs to reinspire morale, reinspire creativity, reintroduce compelling products and then reconvince the customer to pay for it,” he mentioned. “With any brand rooted in product and storytelling, this is much easier said than done.”
The Capri spiral adopted an unraveling of a tie-up between the 2 style holding corporations. In August 2023 Capri agreed to be acquired by Tapestry. The deal would have seen Tapestry paying $57 a share for an enterprise worth of $8.5 billion. Executives hoped the mix would forge a six-brand luxurious conglomerate with world annual gross sales in extra of $12 billion, plus a retail presence in additional than 75 nations and $2 billion in revenue, in accordance with the merger announcement. However the Federal Commerce Fee sued to dam the acquisition, claiming it might result in much less competitors for accessible luxurious purses and equipment. By November 2024, the engagement to be married was formally lifeless.
Since then, Capri has struggled. A Bain and Altagamma outlook report revealed in November reported that the luxurious market was experiencing the primary market contraction in 15 years of two%, barring Covid. Globally, customers have turned to “experiential indulgence” over “conspicuous consumption” as the brand new standing symbols of wealth and wellness. The years forward will see luxe resort journey, elite sporting occasions, and superb eating prioritized over high-priced bougie luggage, footwear, and glam, the report states. Spending in China is anticipated to shrink between 3% and 5% as customers swap to native and extra accessible manufacturers, whereas North and South America are anticipated to carry regular with development between 0% and a pair of%—a small vivid spot within the report. General, the variety of luxurious clients dropped from 400 million in 2022 to about 340 million in 2025.
These tendencies align with the struggles Capri has confronted and a metamorphosis plan that already failed to achieve traction. By model income, Versace fell from $1.1 billion in fiscal 2023 to $821 million in fiscal 2025; Jimmy Choo dropped from $633 million to $605 million; and crown jewel Michael Kors fell from $3.9 billion to $3 billion. Goodwill impairment was a serious driver of the $1 billion loss in fiscal 2025, pushed partly by $430 million in impairment costs associated to Versace and Jimmy Choo—which means these acquired companies at the moment are price lower than beforehand anticipated. Complete impairment throughout all three model property was $797 million.
Of the Versace-to-Prada sale, Idol mentioned the corporate was on observe to stabilizing its enterprise in fiscal 2027, and deliberate to reinstate inventory buybacks. “With the successful completion of the sale of Versace, we plan to use the proceeds to repay the majority of our debt, which will substantially strengthen our balance sheet,” Idol instructed traders.
Siegel mentioned it’s truthful to say at this level that when Tapestry was in search of a deal, “the business somewhat stopped.”
“I think as soon as that announcement hit, people walked out of the building, shut off the lights, and assumed they would be subsumed by Tapestry and thought they would be let go or retire,” mentioned Siegel. “People were effectively either put on pause or self opted in to a pause.”
In distinction, Tapestry-owned Coach took off like a rocket, whereas Capri primarily realized it “needed to go back in the building and turn on the lights,” mentioned Siegel.
Simply months after the cope with Tapestry fell by means of, Idol admitted to traders throughout the third and fourth quarter 2025 earnings calls that the corporate had made a number of “missteps” in making an attempt to reposition the Michael Kors and Versace manufacturers that negatively impacted outcomes. A few of them, he mentioned, “were self-inflicted.”
Idol blamed a “comprehensive transformation plan” of the model that had began again within the fall of 2023 beneath his management that went awry. The transformation was meant to be “quite radical,” mentioned Idol throughout a February investor day presentation, and shifted who the model focused as customers.
“As part of this plan, we aimed to appeal to a younger audience, attempted to elevate price points too quickly, and significantly reduced our signature product offering while injecting too much fashion for our core consumer,” mentioned Idol. That transformation backfired spectacularly. The plan not solely didn’t work it alienated core customers, Idol instructed analysts.
“That was a mistake,” Idol instructed the viewers at a shopper and retail convention in December hosted by Morgan Stanley.
After Capri introduced the deal to dump Versace to Prada, Idol instructed traders in an earnings name that Capri raised costs on Michael Kors’ ready-to-wear enterprise by 20% to 40%. Idol later mentioned that the corporate had since decreased costs by the identical quantity. The upper pricing technique labored for some time, mentioned Idol, however clients finally didn’t take to it. The CEO instructed analysts throughout an investor day occasion final 12 months that the corporate didn’t rework its technique instantly as a result of “there was a… a group who decided we needed to stay with this, and give it a chance and not just pivot after six months.” Idol mentioned he later determined to pivot.
“The customer came back and said, ‘that’s not exactly what we expect from Michael Kors,’” Idol mentioned throughout the fourth quarter earnings name. “There is a window of pricing that we enjoy consuming your products in, and we’d really like you to stay there.”
However undoing harm is difficult. Discounting costs to that extent had a unfavourable impact on the model picture and on the best way clients and potential clients perceived the Kors model, Idol instructed analysts. The corporate’s common unit retail costs (AURs), which point out the typical worth clients pay for merchandise versus the ticket worth, dropped by “high single digits” for the Michael Kors model, mentioned Idol. The widening hole between the raised ticket worth and the precise promoting worth can do a quantity on revenue margins, and it alters model notion.
Rick Patel, managing director of fairness analysis at Raymond James, in contrast Tapestry’s Coach model to Capri. Tapestry elevated its notion out there as being a premier luxurious model, whereas Michael Kors turned often called a closely discounted model.
“Right now, part of improving consumer perception means pulling back on promotions, having compelling newness, and supporting it with strong storytelling,” Patel mentioned. Michael Kors clients “became accustomed to waiting for sales before transacting, which is the opposite of what you want to see for a premier brand.”
Now, Idol mentioned the corporate has refocused on Michael Kors and Jimmy Choo and so they’re going again to fundamentals. In Might, Idol pointed to some early indicators of potential progress pushed by new purse collections, the Leila, Dakota, and Bryant, priced at what has been a historic candy spot for Kors, which is $200 to $400.
Capri can also be planning a serious retailer revamp, renovating 50% of its retail areas over the following three years. There’s additionally a brand new advertising marketing campaign, Lodge Tales, that focuses on “the joy of traveling the world in style.” The primary chapter featured the glittering Ibiza panorama and English mannequin and actress Suki Waterhouse. Through the name with analysts, Idol leaned in closely on the movie star tethers to the Kors model. Idol famous that the Fall-Winter 2025 runway present included attendees Waterhouse and actresses Uma Thurman, Kerry Washington, and Lea Michelle.
Idol additionally promised a “renewed focus” on Jimmy Choo, with advertising centered on “an empowered sense of glamour” and rising the model’s equipment and informal footwear choices.
Idol has mentioned these initiatives may assist Capri return to development in fiscal 2027 and past. The plan, because it stands, is to focus on $4 billion in income from Kors and $800 million from Jimmy Choo. Whether or not Capri can execute the playbook efficiently is an open query and the corporate is asking customers to present a second likelihood to a model they realized to attend for reductions to purchase all in a luxurious market that was smaller than it was two years in the past.
Siegel famous that retail is “rife” with turnarounds. Many corporations that have been as soon as excessive flyers discover themselves on the outs. “That’s what makes it fashion,” Siegel mentioned.
