Parent of Coach will buy Versace in $8.5 billion deal

NEW YORK (AP) — Tapestry, the parent company of luxury handbag and accessories retailer Coach, is buying the owner of fashion brands including Michael Kors, Versace and Jimmy Choo, Capri Holdings.

Big fashion has been getting even bigger through a spate of acquisitions as US players seek more sway in Europe. The approximately $8.5 billion deal puts Tapestry in a better position to do just that in going-to-toe with rivals like LVMH and Kering.

Tapestry Inc., whose brands also include Kate Spade and Stuart Weitzman, said Thursday that the combined company had global annual sales of more than $12 billion and has a presence in more than 75 countries. Tapestry has a market cap of nearly $10 billion, while Capri’s is around $4 billion.

Once completed, the new entity will be the fourth largest luxury company in the world, with a combined market share of around 5.1% of the luxury goods market, according to research firm GlobalData PLC. In the Americas, the company will become the second largest luxury player behind LVMH, with a combined share of 6% of the luxury goods market, GlobalData said.

“The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house,” Tapestry CEO Joanne Crevoiserat said in a prepared statement.

Capri Holdings Ltd. shareholders will receive $57.00 per share in cash.

“By joining 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,” Capri Chairman and CEO John Idol said.