Capri Holdings explores sale as Michael Kors turnaround continues
The owner of Michael Kors and Jimmy Choo has quietly approached potential buyers, though a $809 million currency-hedging liability could complicate any deal.
Capri Holdings has begun informal conversations with prospective investors about a possible sale, according to sources familiar with the matter who spoke to WWD. No formal sales process has been announced, and discussions remain preliminary, with a transaction unlikely in the near term.
The New York-listed group now owns Michael Kors and Jimmy Choo after selling Versace to the Prada Group in December 2025. That exit reduced its net debt to $224 million from $1.5 billion a year earlier, but the company’s market value has contracted sharply. Capri’s publicly traded shares are valued at roughly $1.7 billion, compared with approximately $10 billion in 2022 and in excess of $20 billion in 2014.
A brand in retreat
Michael Kors accounts for approximately 83% of revenue from Capri’s remaining businesses. In the first quarter of fiscal 2027, the brand’s revenue fell 7.1% to $590 million, while operating profit declined from $63 million to $55 million. The broader group posted revenue of $769 million, with the year-over-year decline of 3.5% offset partly by an adjusted operating margin that strengthened to 3.6% from 2.5%, reflecting gains in full-price sales and reduced tariff costs.
Jimmy Choo, by contrast, is gaining ground. Its revenue increased 10.5% to $179 million, with operating profit climbing from $4 million to $13 million. Capri has reduced clearance and markdown inventory by 50% compared with a year earlier. Michael Kors inventory specifically fell almost 27% in the previous quarter as part of the repositioning effort.
The hedging problem
Any potential buyer will confront a substantial complication: Capri’s currency-hedging programme. The company holds $3.5 billion in cross-currency contracts at fixed rates, covering Swiss franc exposure, alongside $2.4 billion for euro positions. According to WWD, these contracts currently represent a liability valued at $809 million that could become due upon a change of control.
Capri cautioned that this figure reflects the contracts’ market value as of June 2026 and can fluctuate. The hedging programme, which WWD described as unusually large for a fashion group, has also generated revenue: the company received interest payments over the three fiscal years ending in 2026.
Strategic reset underway
Chairman and chief executive John D. Idol said Capri had exceeded expectations in its first quarter results and was making progress on strategic initiatives. Michael Kors is reducing its reliance on promotions, increasing marketing activity and refreshing its store network.
Yet Capri lowered its fiscal 2027 revenue forecast to approximately $3.4 billion. Idol cited challenges at Michael Kors, pointing to inventory shortfalls emerging in the second quarter, weaker demand in Europe, the Middle East and Africa, and revised currency assumptions. The company expects Jimmy Choo to continue growing and return to profitability in fiscal 2027.
Capri’s share price rose almost 10% on news of the informal buyer interest.
This article was compiled by the CityLifeBytes editorial desk from the official announcements and reporting listed under Sources.
