The Former CEO Returns to the Brand as It Looks to Respond to Financial Challenges
John Idol has reprised his role as the CEO of Michael Kors, returning to the company during its critical turnaround period. Idol is recognized for significantly driving growth within the firm, transitioning it from a modest designer brand into a publicly traded entity in the luxury handbag market.
As he steps into his newly resumed role, Idol retains his positions as Chairman and Chief Executive Officer of Capri Holdings, the parent company of Michael Kors, Versace, and Jimmy Choo.
Former CEO of Michael Kors, Cedric Wilmotte, will exit the company after a 16-year tenure. Concurrently, Philippa Newman, with 14 years of Michael Kors history under her belt, has been promoted to Chief Product Officer. In this role, Newman will report to Idol, liaising with Chief Creative Officer Michael Kors to oversee licensing and design across all product categories.
The renovation of the executive suite is timely as Capri Holdings strives to recover from a period of stagnation. In August 2023, Capri had agreed to an $8.5 billion acquisition by Tapestry Inc., Coach’s parent company. The proposed deal would have created a significant force in the accessible luxury handbag market. However, the Federal Trade Commission intervened to stop the transaction, leading to a preliminary injunction that effectively cancelled the arrangement.
The stalled deal distressed the business operations of Michael Kors significantly. Its revenues plunged by 15.2 percent, amounting to $1.4 billion in the first half. Idol plans to reinvigorate the business after acknowledging that the brand had prematurely escalated price points and introduced too much fashion for the core consumer.
In a statement on Tuesday, Idol said, “We are moving quickly to implement strategic initiatives to stabilize revenues and return to growth. This reorganization reinforces Michael Kors’ plans to engage and energize both new and loyal consumers, create exciting fashion and core products with compelling value, improve store productivity and return our wholesale business to growth.”
Newman expressed confidence in the brand, stating that it possesses both a strong brand equity and substantial potential. The brand’s strategy includes delivering tailor-made products to specific consumer cohorts to effectively inject Michael Kors back into growth.
The future remains uncertain despite the approval ratings of investors and the stock price of Capri Holdings increasing by 3.5 percent following the announcement of the CEO change. Speculation includes potential plans to sell off Versace and Jimmy Choo, with Michael Kors potentially going private as part of its turnaround strategy.
This isn’t the first time Idol has stepped in. Joshua Schulman was briefly the CEO of Michael Kors, intending to take over Idol’s position at Capri. However, Schulman left the company in early 2022, leading to Idol stepping in as interim CEO for around a year before transferring control to Wilmotte.