Capri Holdings Streamlines its Operations, Sells Versace to Prada

Capri Holdings Limited CPRI has entered into a definitive agreement to sell its Italian luxury fashion house Versace to Prada S.p.A. for $1.375 billion in an all-cash transaction. This significant deal is scheduled to close in the second half of calendar 2025.This acquisition marks another significant consolidation within the global luxury fashion industry, as major luxury groups continue to expand their brand portfolios to strengthen competitive positions in the international marketplace.The sale comes after a successful six-year period during which Versace underwent strategic repositioning to emphasize its luxury heritage and exceptional craftsmanship. This transformation, accomplished through elevated product offerings and refined marketing strategies, has established a solid foundation for the brand's sustainable long-term growth.CPRI Stock Past Three-Month PerformanceImage Source: Zacks Investment ResearchCapri Holdings' Post-Versace Sale StrategyFor Capri Holdings, this transaction represents a strategic pivot toward strengthening its financial position and focusing resources on remaining brands, Michael Kors and Jimmy Choo. The company plans to continue executing previously announced strategic initiatives aimed at maximizing the growth potential of these brands.The proceeds from this transaction will support multiple capital allocation priorities for Capri Holdings, including strategic business investments, reduction of existing debt and potential future share repurchase programs. This comprehensive approach aims to create enhanced shareholder value while providing the financial flexibility needed to pursue growth opportunities.What is More to Know About CPRICapri Holdings continues to demonstrate strong brand equity and growing consumer engagement. Strategic digital marketing, celebrity campaigns and product launches are driving significant engagement. These indicators underscore Capri’s expanding global reach and support the brands' positioning for long-term success.Also, the company has recalibrated pricing across its portfolio to boost full-price sell-through and reduce markdown dependency. Versace introduced accessible luxury products like the Tag Bag and Galaxia sneakers, contributing to mid-single-digit average unit retail growth in the third quarter of fiscal 2025. Michael Kors optimized pricing on key handbag styles, resulting in improved full-price performance during the holiday season. Shares of this Zacks Rank #3 (Hold) company have lost 38.5% in the past three months compared with the industry’s decline of 24.6%. Capri Holdings is facing broad-based challenges as demand for luxury fashion remains soft globally, reflecting a muted consumer environment.Key PicksSome better-ranked stocks are The Gap, Inc. GAP, Stitch Fix SFIX and Deckers Outdoor Corporation DECK.The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for The Gap’s fiscal 2025 earnings and revenues indicates growth of 7.7% and 1.6%, respectively, from fiscal 2024 reported levels. GAP delivered a trailing four-quarter average earnings surprise of 77.5%.Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently has a Zacks Rank of 2 (Buy).The Zacks Consensus Estimate for Stitch Fix’s fiscal 2025 earnings implies growth of 64.7% from the year-ago actuals. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It carries a Zacks Rank #2 at present.The Zacks Consensus Estimate for Deckers’ fiscal 2025 earnings and revenues implies growth of 21% and 15.6%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.8%.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. 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