Versace owner Capri left 'disappointed' after being hit by luxury slump

Capri Holdings, the owner of Jimmy Choo, Versace and Michael Kors, has today revealed it has been hit by the slump in the luxury market. Revenues were down by 16.4% to £830 million ($1.08 billion) in the second quarter of Fiscal 2025.

During the second quarter, ending 28 September, the group's adjusted operating margin was 3% and adjusted earnings per share were £0.50 ($0.65). Gross profit was £535 million ($694) million and gross margin was 64.3%, compared to £642 million ($832) million and 64.4% in the prior year.

Loss from operations was £29 million ($38 million) and operating margin was 3.5%, compared to income from operations of £77 million ($100 million) and operating margin of 7.7% in the prior year.

Brand breakdown:

• Versace's revenue of £155 million ($201 million) decreased 28.2%
• Jimmy Choo's revenue of £108 million ($140 million) increased 6.1%
• Michael Kors' revenue of £569 million ($738 million) decreased 16%

Capri isn't the only fashion powerhouse to feel the burn of a slump in luxury and weaker demand in Asia. LVMH and Kering both reported a drop in sales. However, The Prada Group seems to have come out unscathed after reporting double-digit growth.

John D. Idol, the Company's Chairman and Chief Executive Officer, said: "Overall, we were disappointed with our second quarter results as performance continued to be impacted by softening demand globally for fashion luxury goods. Despite the challenging global retail environment, we remain focused on executing our strategic initiatives to deliver long-term sustainable growth across all three of our luxury houses.

"Versace, Jimmy Choo and Michael Kors continued to resonate with consumers as evidenced by the 10.9 million new consumers added across our databases, representing 13% growth versus last year. This reflects the strong brand equity and enduring value of our three iconic houses."

This follows the announcement made in August 2023 that Tapestry, the owner of Coach and Kate Spade, would acquire Capri. This deal would marry America's two largest luxury houses. However, Fast forward to October 2024 and a federal judge blocked the merger, following a trial held in September in New York.

Judge Jennifer Rochon granted the Federal Trade Commission's (FTC) motion for a preliminary injunction to block the proposed merger.

According to the FTC, if the merger went ahead, it would negatively affect consumers by making the affordable handbag market less accessible.

Commenting on the merger, Idol said: "In August 2023 Capri Holdings announced that we entered into a definitive agreement to be acquired by Tapestry. The District Court recently granted the FTC’s motion for a preliminary injunction to enjoin the transaction pending the FTC’s in-house administrative proceeding.

"We are disappointed with the decision, and consistent with our obligations under the merger agreement, Tapestry and Capri have jointly filed a notice of appeal."

Read TheIndustry.fashion's feature 'LVMH thinks the luxury downturn is a blip, can it be so sure?' to learn more about the slump in the luxury market.