In a surprising turn of events, Capri Holdings defies expectations post-Versace sale, sparking questions about its strategic shift and future growth. But here's where it gets controversial: Is shedding Versace the right move for Capri, or has the company sacrificed a crown jewel for short-term financial stability? Let’s dive in.
Capri Holdings, the powerhouse behind Michael Kors and Jimmy Choo, reported a 5.9% year-on-year revenue decline to $1.03 billion in the third quarter of fiscal 2026, ending December 27. Despite this dip, the results surpassed both internal forecasts and analyst predictions, leaving many wondering how the company managed to outperform in a challenging market. This quarter marks Capri’s first financial report since the completion of Prada Group’s acquisition of Versace in December 2025—a move that has reshaped the company’s portfolio and financial landscape.
“The sale of Versace was a strategic decision to fortify our financial foundation, giving us the flexibility to invest in Michael Kors and Jimmy Choo’s long-term growth,” explained John D. Idol, Capri’s chair and CEO. But is this a bold step forward or a risky gamble? Critics argue that letting go of a brand as iconic as Versace could weaken Capri’s luxury appeal, while supporters see it as a pragmatic move to streamline operations and focus on core assets. What do you think? Share your thoughts in the comments below.
Capri has already begun leveraging the $1.4 billion proceeds from the Versace sale to reduce its debt. By the end of the quarter, the company’s net debt had plummeted to approximately $80 million, down from $1.6 billion in the previous quarter. Interim CFO Rajal Mehta highlighted this as a significant milestone, emphasizing the company’s improved financial health. However, the question remains: Can Capri sustain this momentum without Versace’s star power?
Breaking down the numbers by brand, Michael Kors saw a 7.3% revenue decline to $858 million, while Jimmy Choo posted a modest 1.9% increase to $167 million. Idol expressed satisfaction with the quarter’s performance, noting that both brands are advancing strategic initiatives to secure long-term success. But here’s the part most people miss: While Michael Kors faces headwinds, Jimmy Choo’s growth suggests a potential shift in focus toward smaller, high-margin brands. Could this be the future of Capri’s strategy?
Regionally, the Americas saw a 7% revenue drop to $646 million, though Mehta pointed to encouraging retail trends in North America for Michael Kors. EMEA revenues, however, rose by 5% to $268 million, while Asia revenues fell 4% to $111 million. And this is where it gets even more intriguing: Capri’s performance in EMEA hints at untapped potential in international markets, but can the company replicate this success globally?
The recent Saks Global bankruptcy has also raised eyebrows, with Capri owed $33 million. Mehta downplayed the impact, calling it “not very material,” and expressed optimism about working with Saks’s new management team. But is this optimism warranted? Saks’s struggles could signal broader challenges in the luxury retail sector, and Capri’s exposure, though reserved for, remains a risk. Idol, however, remains confident, citing Saks’s past recovery with Neiman Marcus as a positive precedent. Do you share his optimism, or is this a red flag?
Looking ahead, Capri expects tariff mitigation efforts to continue into 2027, with sourcing efficiencies and targeted price increases offsetting much of the impact. The company projects full-year 2027 revenues between $3.45 and $3.475 billion, with Michael Kors contributing $2.86 to $2.875 billion and Jimmy Choo $590 to $600 million. Idol reaffirmed his optimism about both brands’ sustainable growth potential, but the road ahead is far from certain.
As Capri navigates this post-Versace era, one thing is clear: The company is betting big on its remaining brands. But will this strategy pay off, or has Capri traded long-term prestige for short-term stability? Weigh in below—your perspective could spark the next big debate in luxury fashion.
