Capri's post-Versace reset: Michael Kors preps 'modern glamour' revival

Capri Holdings officially offloaded Versace this week, marking a “seminal moment” for a company now seeking to reset and refocus. The US fashion giant has maintained its stance that the divestiture is not a retreat, but a liquidity-backed strategic reboot, positioning Michael Kors as its growth engine.

Capri’s outlook post-Versace sale was shared in a Morgan Stanley conference call by chief executive officer John Idol, who also helms the Kors brand. Here, Idol acknowledged that prior repositioning efforts had been misguided, pointing to a period in which Michael Kors had drifted from its core identity, resulting in a confused consumer base.

Michael Kors reverses turnaround, plots return to ‘modern glamour’

Initial efforts to enact a “complete transformation” did not resonate, Idol admitted. The executive, however, expressed more enthusiasm for its next phase: returning to Kors’ DNA through “modern glamour” and more accessible aspiration. At the crux is a mission to reinstate Kors’ “jet-set” roots, already evidenced by hotel-based storytelling narratives. The UK became a testing ground for this reset, with Idol noting that the brand had seen its full-price business turn positive, reinforcing the new creative direction.

Attention has also been drawn to Michael Kors’ store fleet. The brand shuttered around 125 stores over the past three years, stabilising its network in preparation for a selective rollout of a reshaped store concept. “We will very comfortably renovate over 50 percent of our store fleet worldwide over the next three years. If we can do it faster, we will,” Idol noted, referencing plans to create a more warm, residential retail design.

Within this new concept, Kors has put an emphasis on ready-to-wear, which will have an expanded presence in renovated sites, alongside a new ‘Jet Lounge’ feature, introducing hospitality offerings into the retail experience, which will be featured in some locations.

Doubling down on this return to “modern glamour”, Idol said that Capri has further revised Michael Kors’ pricing architecture. While its prior restructuring had alienated core consumers and weakened full-price engagement, Michael Kors is positioning to support its revised aesthetic. As such, the brand will reduce its reliance on promotional activity and focus on restoring value perception. Idol added that “as we see the renovations work, the new product work, the pricing architecture work, there’s a big gap between where we were and where we are today and where we could be”.

2026 to usher in major turnaround: Store renovations and Asia boost on horizon

Capri is therefore confident in its ability to return to near-peak revenue within a sustainable timeframe. “Michael Kors is a 44-year-old brand. It had a peak sales volume of about 4.6 billion dollars and we’re down to approximately three billion dollars today. We feel very strongly that we will be able to return the company to four billion dollars over a period of time,” Idol underlined.

Capri’s other brand, Jimmy Choo, is further forecasted to turn positive in the next fiscal year, driven by lifestyle expansion, accessories and casual footwear. The brand’s retail fleet has already undergone widespread renovations and is now focused on broadening its appeal.

Throughout the current financial year, Capri has swung back-and-forth between profit and loss, returning to profit in the first quarter before slipping back into the red in the second. A renewed focus has now been placed on improving margins through a reduced reliance on off-price channels, targeted price increases, and getting Asia back on track. Elsewhere, in North America, the market was described as “relatively healthy”, with less consumer stress evidenced and positivity extending into next year. In Europe, the market has remained strong, yet Capri retains a sense of cautiousness towards the region.

Into the coming financial year, Capri is expecting a relatively “flattish” first half as the company moves through store renovations, tackles Asia softness and cleans up product assortments. By the third quarter, the group is anticipating a shift on the back of such changes, reflecting a pivot in performance over what is to be a milestone turnaround year for the company.