Versace Goes Prada: Capri's Big Exit Sparks Fashion Power Shift - Capri Holdings (NYSE:CPRI)

Capri Holdings Limited (NYSE:CPRI) saw its shares tick higher in Thursday’s premarket action after the company unveiled a definitive agreement to divest the luxury fashion house Versace to Prada S.p.A. in a $1.375 billion all-cash deal, subject to adjustments.

The transaction, which still awaits regulatory approvals and other standard closing conditions, is scheduled to be completed in the latter half of 2025.

John D. Idol, Chairman and CEO of Capri Holdings, expressed optimism about the sale, citing the brand’s transformation over the past six years and its reinforced positioning in the high-end luxury space.

He said the deal aligns with the group’s broader plan to improve financial health and boost the long-term performance of its remaining brands, Michael Kors and Jimmy Choo.

According to Benzinga Pro, CPRI stock has lost over 62% in the past year. At the end of the third quarter, the company’s cash and equivalents totaled $356 million, and total borrowings outstanding were $1.48 billion, resulting in a net debt of $1.12 billion as of December 28, versus $1.60 billion last year.

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The Italian fashion house, established 46 years ago by Gianni Versace and most recently led by Donatella Versace, will be exposed to the resources and brand ecosystem of the Prada Group.

Financial Times, citing sources familiar with the negotiations, reports that last month, Donatella stepped down after three decades at the creative helm, passing the reins to Dario Vitale, former design head at Prada-owned Miu Miu.

But the creative leadership and Capri’s original valuation of 3 billion euros were key hurdles in reaching a final agreement.

Capri shares have fallen over 33% since President Trump's earlier announcement of sweeping tariffs. According to the FT, proceeds from the sale would help strengthen the firm’s balance sheet and enable accelerated investments in its core brands. The decision had shaken the firm’s market cap down to around $1.5 billion. However, the tariff pause may instill some confidence in the firm.

In February, the company reiterated its FY25 revenue projections at $4.4 billion versus the $4.51 billion estimate. Revenues are expected to be $4.1 billion in FY26 and $4.4 billion in FY27.

Price Action: CPRE shares are trading higher by 2.02% to $16.69 premarket at last check Thursday.

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Photo: Shutterstock

CPRICapri Holdings Ltd

$19.37-0.05%

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