Capri Struggles as $675M Impairment Charge Weighs on Q3 Performance
Capri Holdings is facing mounting challenges as the company posted a $675 million non-cash impairment charge in the third quarter, sending shares tumbling 10% to $21.61. The luxury group—home to Michael Kors, Versace, and Jimmy Choo—reported an 11.6% drop in revenue to $1.26 billion, alongside a net loss of $547 million, a sharp decline from the $105 million profit posted a year earlier. The disappointing results come as Capri, which sources say has been exploring the sale of Versace and Jimmy Choo, continues to struggle with sluggish sales and strategic missteps.
Chairman and CEO John Idol acknowledged the difficulties but remained optimistic about a turnaround, stating, “Entering 2025, we are optimistic about our path forward,” while noting that a full recovery is expected by 2027. The CEO plans to present a strategic update at an investor day on Feb. 19. In the meantime, analysts remain skeptical, with GlobalData’s Neil Saunders noting, “A decline of 11.6% is way worse than the market and signifies that the brands are losing traction with many shoppers.” Capri’s restructuring efforts include reintroducing signature statement pieces at Versace, recalibrating pricing and product balance at Michael Kors, and expanding accessories and casual footwear at Jimmy Choo. While Idol insists the company remains committed to building all three brands, speculation continues to swirl around potential asset sales, with industry heavyweights—including former Gucci CEO Marco Bizzarri and Prada—reportedly evaluating Versace, while Jimmy Choo cofounder Tamara Mellon is said to be considering a bid for the footwear label.