Last week, the long-rumoured Prada takeover of Versace was finally confirmed. And, while many began to speculate on what could come from the merging of the two Italian giants, at Versace’s now former owner, US conglomerate Capri Holdings, plans are already seemingly underway for the remnants of its portfolio.

Following the announcement of Prada’s acquisition, which amounted to 1.375 billion dollars, subject to certain adjustments, Capri Holdings’ chairman and CEO, John D. Idol released a statement both celebrating Versace’s progress during its six years under the group’s wing and looking ahead to future opportunities for Michael Kors and Jimmy Choo.

Most notably, Idol highlighted plans to “increase shareholder value, strengthen our balance sheet and power the future growth of Michael Kors and Jimmy Choo”, through the continued execution of “strategic initiatives” outlined during the company’s most recent Investor Day.

During the event, at which time no deal between Prada and Capri had been confirmed, Idol told shareholders and media outlets that there was a need to “reset this business”. Capri’s chief financial and operating officer, Tom Edwards, meanwhile, zoned in on an expanded product offering and omnichannel experience for the company’s portfolio.

The executives also outlined financial projections for the years ahead, with total group revenue anticipated to come to 4.7 billion dollars by FY28, up on the 4.4 billion dollars forecast for FY25. Michael Kors is expected to see revenue rise to 3.2 billion dollars by 2028, while Jimmy Choo is anticipated to post 600,000 dollars in revenue, remaining flat on predictions for the current financial year.

Capri to continue on path of Michael Kors-focused strategic review

The sale of Versace comes months after Capri’s attempt to merge with market competitor Tapestry was blocked by regulatory officials in the US. During court proceedings, executives of both firms attempted to highlight issues within the increasingly complex and saturated premium market, with designer Michael Kors himself also stepping up to talk on the topic of “brand fatigue”, causing a lessened demand for his brand. Despite this, the judge overseeing the case ruled in favour of the US’ Federal Trade Commission, leaving Capri scrambling to regain investor confidence.

Almost immediately, the company decided to turn its attention towards Michael Kors, where it initiated a leadership reshuffle. Industry insiders then ignited speculation of a sale for Versace and Jimmy Choo, with some media outlets suggesting banks had been called in to advise on potential deals. Idol stepped up as chief executive officer for Michael Kors, tasking himself with leading its reorganisation and “expense reduction initiatives”, while a chief product officer was also named, pointing at a proactive approach to a turnaround.

While the exact details of the strategy are yet to be outlined in full, it does appear that Capri needs to quickly regain its footing, particularly upon the release of its Q3 report in February, in which the company posted widening losses of 590 million dollars, up from an operating profit of 122 million dollars in the same period of the previous year. Revenue dropped at Michael Kors by 12.1 percent and at Jimmy Choo by 4.2 percent, leading Idol to state that he was to “review its strategic initiatives to improve current sales trends” upon posting the “disappointing” results.