Capri Holdings Ltd. is moving some of its footwear production in-house.
The fashion group — parent to Jimmy Choo, Michael Kors and Versace — announced that it has signed an agreement to acquire Italian shoe manufacturer Alberto Gozzi S.R.L. for an undisclosed amount. The deal is expected to close in the first three months of 2020 during Capri’s fiscal fourth quarter.
“We are excited to welcome all of Gozzi’s talented craftsmen to the Capri Holdings Group,” said chairman and CEO John D. Idol. “This acquisition allows us to further align with the industry’s best practices and to strengthen our technical competencies while cementing our position in the global luxury market.”
As part of the deal, Alberto Gozzi will manufacture Jimmy Choo and Versace shoes as well as add the production of Michael Kors Collection footwear at a later date. The family-owned factory, which was founded in 1974, is located in Tuscany, Italy, and is responsible for producing high-end footwear for many top luxury fashion brands, including its own private-label collection.
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The deal marks the first factory acquisition by Capri, which had expanded its portfolio at the end of last year with its purchase of Italian fashion house Versace. The transaction, which amounted to an enterprise value of 1.83 billion euros (or $2.12 billion), led the firm to change its name from the former Michael Kors Holdings Ltd. and begin trading under the New York Stock Exchange ticker symbol CPRI.
Idol has previously announced a desire to transform the London-based company into a global fashion luxury conglomerate, which is dominated by the likes of Kering and LVMH Moët Hennessy.
For the second quarter ended Sept. 28, Capri noted adjusted earnings of $1.16 per share on profits that dipped 7.8% to $177 million, missing Wall Street’s forecast of $1.24 per share earnings. Sales, however, met consensus bets of $1.44 billion — a 15.1% gain from the same period in 2018.
The firm in early November reiterated its guidance for full-year revenues of $5.8 billion and adjusted earnings per share of $4.95. For the third quarter, it expects Versace to log revenues of $180 million, Jimmy Choo to bring in $165 million and Michael Kors to record sales slightly below $1.2 billion.
“From a longer-term perspective, we are encouraged with the progress we are making developing our global fashion luxury group,” Idol said at the time. “The integration of Versace is going smoothly, and Jimmy Choo continues to advance its strategic initiatives. Additionally, the Michael Kors brand repositioning efforts are resonating with customers.”
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