Did Capri Holdings really put Versace and Jimmy Choo up for sale?

After the halt of the acquisition of Capri Holdings by Tapestry last October, rumors began circulating just days before the end of the year about the possible sale of Versace and Jimmy Choo by the group founded by Michael Kors. WWD reports that Capri Holdings allegedly contacted the English bank Barclays to discuss a possible sale and the best way to find buyers; neither party has commented on the rumor, so it is unclear whether the two brands will be sold together or separately. The online publication also reported that Barclays would like to start receiving offers before Christmas. The $8.5 billion merger deal between Tapestry and Capri was blocked by the American antitrust authorities, as the U.S. claimed it would create «a monopoly in the accessible luxury market» despite the declining sales of Capri Holdings' brands. Therefore, it is possible that the group is seeking other ways to offload underperforming brands to focus on the Michael Kors brand. Last October, Pambianco News reported that among those interested in acquiring Versace could be Exor, owned by John Elkann, and Kering. 

Despite rumors of interest from Exor and Kering, market forecasts suggest that Barclays may have to organize a auction sale for the two brands. Since the U.S. blocked Tapestry's operation, Capri Holdings’ stock has plummeted on the stock market. Capri has been planning a strategic move to revive the group since 2022—two years ago, it even considered the sale of the entire company. The CEO of Capri had started discussions with potential buyers for Versace and Jimmy Choo before Tapestry stepped in. Now that the merger has been blocked, Capri Holdings has no choice but to resume its previously shelved revival plan. 

But why sell Jimmy Choo and Versace and keep Michael Kors? This year, the two brands now rumored to be for sale have reported various revenue losses: in the first half of 2024, Jimmy Choo saw a decline of 0.6%, while Versace experienced a severe crisis with a 22.1% drop. Removing the two brands from the group could allow Capri Holdings to focus on its most profitable brand and expand it, despite Michael Kors’ sales also taking a hit this year. According to Capri Holdings CEO John Idol, the biggest mistake was removing some of Versace's most popular items from the market, statement pieces that kept the brand's identity strong and sustained sales. Even the brand elevation strategy implemented in recent years has contributed to Versace's decline, the CEO said according to WWD, acknowledging that price hikes resulted in the loss of a significant portion of aspirational consumers. Idol commented that the focus now must return to that clientele, while Jimmy Choo will need to pivot towards a more casual offering. This is, of course, assuming the sale of the two brands does not actually happen.