Capri Holdings Limited, a US luxury fashion group that owns the brands Michael Kors, Versace and Jimmy Choo, fell short of its own expectations in the second quarter of the current financial year. The second quarter ended on September 30th.
Total sales of 1.29 billion US dollars (1.2 billion euros) fell by 8.6 percent compared to the previous year. On a constant exchange rate basis, total sales fell by 10.1 percent. In retail, total sales fell in the high single digits, mainly due to weakening demand in North and South America as well as problems with the launch of Michael Kors Americas Ecommerce.
Sales are falling for all three brands
All three brands are affected by the decline: Michael Kors’ sales of 879 million US dollars (822 million euros) fell by 8.6 percent, Versace by 9.1 percent to 280 million US dollars (262 million euros). ) and Jimmy Choo by 7.0 percent to 132 million US dollars (123.5 million euros).
Gross profit was $832 million (€779.5 million), compared to $951 million (€890.9 million) the previous year. Gross profit margin also declined, primarily due to lower full-price sales, primarily in North and South America, partially offset by lower supply chain costs.
John D. Idol, Chairman and CEO of Capri, said: “Capri Holdings’ second quarter results were below our expectations due to macroeconomic headwinds as well as challenges in implementing e-commerce. In early July, we launched a new e-commerce platform for Michael Kors in North and South America. Although we are excited about the long-term benefits, the transition negatively impacted our second quarter results. Additionally, consumer demand for fashion luxury goods weakened during the quarter, particularly in North and South America.”
Diversification through merger with Tapestry
Idol was confident about the coming months, especially with regard to the planned merger with competitor Tapestry, which includes the brands Coach, Kate Spade and Stuart Weitzman: “We look forward to the successful completion of the merger transaction with Tapestry Calendar year 2024. We are confident that this combination will deliver value to our shareholders and create new opportunities for our dedicated employees around the world as Capri Holdings becomes part of a larger and more diversified company. By combining with Tapestry, we will have greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands.”
The US fashion group Tapestry Inc. was able to increase its sales of around 1.51 billion US dollars (1.42 billion euros) to a new record in the first quarter of the 2023/24 financial year. Revenues rose by 0.4 percent compared to the same period last year (currency-adjusted +2 percent) and reached a new high in the company’s history. The growth was driven primarily by the Coach brand.