In Europe, the LVMH conglomerate is responsible for the vast majority of the luxury market; its name refers to Louis Vuitton, Moet, and Hennessey, but it owns many more brands as well. In an apparent bid to establish a similarly collaborative U.S. luxury house, the Tapestry company, which already owns brands such as Coach and Kate Spade, has acquired Capri Holdings, parent of Versace, Jimmy Choo, Michael Kors, and other luxury brands. Through the acquisition, the companies hope to broaden the brands’ access to global markets. Currently Capri is stronger in Europe and the Middle East, whereas Tapestry has a stronger foothold in Asia. By merging, such market access gets spread across all brands. Furthermore, the merger managers anticipate that by combining forces, the companies can save an estimated $200 million in operating costs, due to their economies of scale and enhanced efficiencies in their newly shared digital marketing, transportation, and supply chain efforts. Such strategic moves also represent a likely response to the current slowdown in U.S. luxury markets, such that establishing and maintaining a strong international profile may constitute a necessary goal for all luxury brands.

Sources: Jordyn Holman and Elizabeth Paton, “Coach Owner to Buy Parent of Versace and Michael Kors in Luxury Merger,” The New York Times, August 10, 2023