Global luxury fashion group Capri Holdings, parent company of Versace, Jimmy Choo and Michael Kors, announced it has had a challenging second quarter of fiscal 2025, marked by declining sales and margins. According to the financial report, global market conditions have a direct impact on the group’s profitability. However, the addition of millions of new customers provides a bright spot.
- Capri Holdings reports a challenging second quarter with declining sales and margins, impacted by global market conditions.
- Jimmy Choo is the only brand reporting sales growth.
- Capri Holdings adds millions of new customers and focuses on cost control.
The fashion group’s turnover fell by 16.4 percent in Q2 to 1.08 billion US dollars (1.03 billion euros), both in reported and in constant currency. This reflects a broader trend that Capri Holdings is also experiencing. Namely: the decline in demand for luxury goods worldwide due to growing protectionism amid economic uncertainties worldwide.
Capri’s gross profit plummets from 832 million US dollars last year to 694 million dollars (674 million euros), with a margin decline of 10 basis points. Operating losses amounted to 38 million US dollars (37 million euros), a clear turnaround from an operating profit of 100 million dollars a year earlier.
The fashion group’s net result amounts to 24 million dollars (23 million euros), or 0.20 dollars per share. Last year the net result was 90 million dollars. On an adjusted basis, Capri Holdings achieved an operating profit of 32 million US dollars (31 million euros) with a margin decrease from 12.2 to 3 percent.
The text continues below the image.
Capri’s portfolio: Versace, Jimmy Choo en Michael Kors
The Versace brand, once the crown jewel of Capri’s portfolio, sees its turnover fall by 28.2 percent to 201 million US dollars (186 million euros). The decline in sales demonstrates the regional challenges: in America sales fell by 33 percent, in EMEA by 28 percent, and in Asia by 20 percent. This results in an operating loss of 3 million US dollars, while the margin turns to negative 1.5 percent.
Jimmy Choo is the only brand within Capri that shows sales growth. The brand recorded an increase of 6.1 percent to 150 million dollars (139 million euros). The growth is especially visible in the EMEA region, where turnover is growing by 25 percent, while America and Asia are experiencing a slight decline. Although the brand reports an operating loss of USD 5 million, it shows improvement compared to last year. The brand says it manages its costs better.
Michael Kors, Capri’s largest brand, sees its turnover fall by 16 percent to 738 million US dollars (707 million euros), with declines in both retail and wholesale. Asia in particular shows weakness with a 43 percent decline in sales.
Despite the decline in revenue, Capri Holdings continues to invest in its strategic initiatives, such as customer growth. CEO John Idol seems optimistic about this. And not without reason: a total of 10.9 million new customers have been added to the customer databases of the three brands. This is an increase of 13 percent compared to last year.
Tapestry-overname
Meanwhile, Capri Holdings is in the process of being acquired by Tapestry, a merger expected to generate synergies for both parties. However, the US Federal Trade Commission (FTC) recently made a decision temporarily blocking the transaction. Capri Holdings, in collaboration with Tapestry, has appealed this decision.
Given the uncertainties surrounding this merger and the pending appeal, Capri Holdings does not provide specific financial guidance at this time. The focus for the time being is on cost control and strengthening the customer relationship.
Source: fashionunited.nl
