Are Versace and Jimmy Choo for sale?

Just weeks after a planned merger between fashion giants Tapestry and Capri Holdings fell through, the latter appears to be cleaning out its brand inventory. Speculation is rife that Capri is putting both Versace and Jimmy Choo up for sale, which would leave the luxury group with only Michael Kors under its umbrella.

Capri is said to be working with the bank Barclays to find buyers for the two brands, reports WWD on the basis of. Sources. The process is said to have only just begun, so it remains unclear whether the two brands will be sold at all and, if so, whether they will be sold together or separately.

Capri’s future became uncertain earlier this year after an $8.5 billion takeover by Tapestry was blocked in a Federal Trade Commission (FTC) antitrust lawsuit. After the decision was announced, Capri shares lost significant value and the merger agreement was ultimately terminated.

Declining demand for luxury goods calls the future into question

However, there are signs that trust in the Michael Kors brand has remained intact. In November, the group announced that its own chairman, John Idol, would take on the role of chief executive officer for the New York label as part of “reorganization plans and cost-cutting initiatives.” Philippa Newman has also been promoted to chief product officer, having most recently served as the brand’s president of accessories and footwear.

These changes came after a weak sales period for Capri, which reported a 16.4 percent decline in consolidated sales for the second quarter of the year. Jimmy Choo was the only brand in Capri’s portfolio to post a gain, with sales rising 6.1 percent in the quarter. Versace and Michael Kors, on the other hand, recorded declines of 28.2 percent and 16 percent respectively.

The reason for the decline in sales was cited as a slowing global demand for luxury goods, an argument that designer Michael Kors himself underscored during the court case surrounding the Capri-Tapestry merger. In court, Kors argued that the industry had “reached the point of brand fatigue” and also acknowledged that his own brand had lost favor with consumers.

But while optimism still appears to be low, there still appears to be some investor interest in Capri. According to a recent filing with the SEC, Oddo BHF asset management firm has acquired 610,000 shares of the fashion giant worth approximately $25.9 million. Geode Capital Management LLC also increased its shareholding in the group by 2.2 percent in the third quarter of the year and now owns shares in the company worth around $82.4 million.