Capri reportedly exploring sale of its Versace, Jimmy Choo brands; shares jump

Capri Holdings (NYSE:CPRI) shares rose as much as 7% in premarket trading on Monday after Women’s Wear Daily (WWD) reported that the company is exploring potential buyers for its Versace and Jimmy Choo brands, working with Barclays (LON:BARC) to facilitate the process.

While discussions are in the early stages, it remains unclear whether the two brands will be sold together, separately, or at all.

According to WWD’s report, a data room is being prepared to provide confidential information to prospective buyers, with Barclays aiming to gather initial expressions of interest before Christmas.

Barclays could oversee an auction-style process where bidders submit offers over several rounds. Initially, potential buyers would access data to make preliminary bids, followed by direct engagement with management to refine their offers, the report says.

The potential sale follows a turbulent period for Capri. After its $8.5 billion acquisition by Tapestry (NYSE:TPR) was dropped due to antitrust concerns, the company has been reassessing its strategy.

The failed deal, which valued Capri at $57 per share, has left its stock significantly lower, closing at $21.36 on Friday. Selling Versace and Jimmy Choo could allow Capri to focus on turning around its largest brand, Michael Kors.

This is not the first time Capri has considered selling its divisions. In late 2022, the company’s board explored “certain potential strategic alternatives” with Barclays, including the sale of Versace and Jimmy Choo, spinning them off through an IPO, or selling the entire company.

At the time, bankers noted there were “a limited number” of potential buyers for Capri and “less strategic interest in acquiring” both brands together.

Capri’s chairman and CEO, John Idol, kept options open during negotiations with Tapestry, holding discussions with other potential buyers.

Regulatory filings mention meetings with leaders of a “multi-industry holding company” and an “international luxury goods company,” both expressing interest in the luxury brands. Those talks were put on hold during the Tapestry deal but may have been revived following its collapse.

Following the collapse of the deal last month, earlier discussions about potential buyers for Versace and Jimmy Choo may have regained momentum.

During an analyst call last month, Idol outlined his vision for the fashion group and addressed questions about exploring strategic options for the two luxury brands.