Capri Holdings has informally approached prospective investors about a possible sale, although a potential $809 million liability linked to its currency-hedging contracts could complicate any transaction.
Capri has not announced a formal sales process and the discussions remain preliminary, with a transaction not expected in the near term, sources familiar with the matter told WWD.
The New York-listed luxury group Capri now consists of Michael Kors and Jimmy Choo after completing the sale of Versace to the Prada Group in December 2025. By sharpening its portfolio Capri has reduced its net debt to $224 million compared with $1.5 billion a year earlier.
Michael Kors remains central to the group’s overall performance, representing approximately 83% of revenue from Capri’s remaining businesses in fiscal 2026.
Investors currently value Capri’s publicly traded shares at about $1.7 billion in total, roughly 40% less than at the beginning of 2026. That compares with a market value of around $10 billion in 2022 and more than $20 billion in 2014.
Currency hedges complicate a potential transaction
One hurdle that any potential buyer will need to face is Capri’s currency-hedging programme. The company has $3.5 billion of fixed-rate cross-currency contracts tied to its investments in Swiss francs and a further $2.4 billion tied to investments in euros.
Currently the contracts carry an estimated liability of $809 million, which sources told WWD could become payable if Capri is sold. However, Capri said this figure reflects the contracts’ market value as of June 2026, meaning it can change and should not be treated as a fixed bill.
WWD described the scale of Capri’s currency-hedging programme, which consists of contracts intended to reduce Capri’s exposure to movements in exchange rates, as unusually large for a fashion group. Yet they have also created revenue for the group, with Capri receiving $352 million in interest over the three fiscal years ended in 2026.
Michael Kors sales continue to decline
In its first-quarter fiscal 2027 results, Capri reported revenue of $769 million, down 3.5% year on year. Adjusted operating margin rose from 2.5% to 3.6%, supported by higher full-price sell-through and lower tariff rates.
Meanwhile Michael Kors revenue fell 7.1% to $590 million, and operating profit declined from $63 million to $55 million.
Jimmy Choo revenue on the other hand increased by 10.5% to $179 million, while operating profit rose from $4 million to $13 million. Following the pre-administration sale of Harvey Nichols to Frasers Group, Jimmy Choo is one of the luxury brands that is likely to recover no more than 15% of the £174,201 that it is owed, according to early-stage estimates from the department store group’s administrators, FTI Consulting.
Harvey Nichols’ primary trading company entered administration owing £270.5 million to unsecured creditors
Capri has reduced markdown exposure and refreshed its stores as part of the Michael Kors repositioning. Chairman and CEO of Capri, John D. Idol, said the company had 50% less clearance and markdown inventory than a year earlier, while Michael Kors inventory had fallen almost 27% in the previous quarter.
Idol said he was “encouraged” by the company’s first quarter results, “which exceeded our expectations and demonstrated the progress we are making to build a stronger and more profitable business.”
He added that the company’s strategic initiatives across both brands have been driving “deeper consumer engagement through enhanced brand storytelling and compelling product innovation.”
Yet, the group lowered its fiscal 2027 revenue forecast to approximately $3.4 billion. Idol commented that while he expects “Jimmy Choo to continue to grow and return to profitability” in fiscal 2027, the revenue outlook had been impacted by “certain headwinds at Michael Kors”, including “lower than anticipated inventory levels in the second quarter, softer trends in EMEA and updated foreign currency exchange rate assumptions”.
He added: “Looking beyond fiscal 2027, the opportunity for Michael Kors and Jimmy Choo remains significant. As our strategic initiatives continue to gain momentum, Capri Holdings is well positioned to drive sustainable growth, enhance profitability and create meaningful long-term value for our shareholders.”