Contrasting performances for Tapestry and Capri Holdings before merger

Tapestry and Capri Holdings have just released their revenue figures for the last quarter of 2023, revealing divergent performances as they prepare to merge before the end of this year. Tapestry (which includes the brands Coach, Kate Spade New York, and Stuart Weitzman) increased its revenues during the second quarter and the semester ending in 2023, with a revenue of $2,084.5 million, up from $2,025.4 million the previous year. However, net income slightly decreased compared to 2022: $322.3 million, compared to $329.9 million.

On the other hand, Capri Holdings' figures for the shifted third quarter are slightly down. The luxury group, which includes the brands Jimmy Choo, Michael Kors, and Versace, reported a revenue of $1,427 million compared to $1,512 million the previous year, with a significant decrease in net income to $105 million, compared to $225 million in 2022.

Multiple factors have favored Tapestry's growth: firstly, the strong performance of the Chinese market, which is rapidly accelerating, and the stability of sales in North America, despite inflation. Revenue in this market exceeded analysts' expectations, who were expecting more cautious results. Another advantage is that Tapestry acquired 2.5 million new customers last year, especially a young and dynamic clientele belonging to the Millennial and Generation Z generations. The company has also strengthened its omnichannel strategy, thus improving its offerings and services.

The acquisition of Capri Holdings by the luxury group Tapestry will be closely watched in 2024, a pivotal year for the company's future. This strategic merger, which brings the combined revenue to approximately $12 billion, should capitalize on the respective strengths of the two entities. While Capri Holdings relies on the strong identity of its brands in the luxury footwear and ready-to-wear universe, Tapestry can rely on its power in terms of technological infrastructure and platform performance. The financial operation, which brings together the two groups, is valued at $8.5 billion.