Capri Holdings’ latest earnings call on February 5 painted a picture of a company course-correcting after pricing missteps at Michael Kors, while Versace and Jimmy Choo leaned further into quiet luxury strategies. It was also the first earnings call after the merger between Tapestry and Capri fell through in November.
“The merger was highly distracting for the management team, and we didn’t have as much time to focus on long-term strategies,” Capri Holdings CEO John Idol said on the call. “Now, we’re fully engaged in repositioning our brands.”
Revenue for Michael Kors fell to $2.75 billion for the full year, down from $3 billion last year. Its Americas revenue, which made up 68% of total sales in 2024, dropped 10%, while Asia fell 27%. The company posted a $547 million net loss, driven by a $602 million non-cash impairment charge. The brand’s attempt to push higher price points on handbags and ready-to-wear backfired, forcing it into a more promotional stance to win back its core customer.
“We raised prices significantly over the last 24 months, and that was successful coming out of Covid,” said Idol. “But the customer got more and more choiceful, and unfortunately, we had to be more promotional because we had to get to the price points where she would buy the brand.”
The overcorrection led to steep discounting, eroding brand image and profitability. The company has since reversed course, bringing certain handbag price points back down to historical levels. Idol specifically pointed to two handbags — the Alita Soft Shoulder Bag ($398) and the Layla Satchel ($258) — as early success stories.
“We now know where [the consumer] puts the pricing and valuation on the Michael Kors brand,” Idol said. “We have very good data analytics and consumer insights around that.”
At the same time, Michael Kors is undergoing a marketing overhaul after its “transformation plan” failed to resonate with customers. Instead of chasing Gen Z, the brand is refocusing on its “jet set” heritage, with a new campaign titled “Traveling the World in Style” set to roll out later this year. The company will be announcing more details about the campaign during its investor day on February 19.
In contrast to Michael Kors, Versace has been doubling down on its luxury positioning — a strategy that appears to be paying off, albeit slowly. “We made a decision that we were going to lean into luxury and craftsmanship more, back to the origins of the brand,” Idol said. Versace reported $810 million in revenue for fiscal full year 2025, with a high single-digit negative operating margin, and expects $800 million in revenue and break-even margins in fiscal 2026.
The shift away from a more maximalist aesthetic and toward understated, high-end craftsmanship aligns with the broader quiet luxury movement that has dominated high fashion in recent years.
“We are cleaning up the Versace business. … We have some other announcements on the next call that will further position this brand as a pure luxury house,” said Idol. “The wealthy customer is leaning into us, and we know if we get that right — while also bringing back the aspirational consumer — we’ll see an inflection in Versace next year.”
One of Versace’s key adjustments is rebalancing its price architecture to regain lost aspirational consumers. The Tag Bag ($950-$1,250) and the Galaxia Sneaker ($550) are two recent launches aimed at filling a gap in entry-level luxury pricing.
Another major move is happening in menswear, where Versace’s silk shirts — once priced as high as €1,500 ($1,562) — are being repositioned closer to €950 ($989), reflecting more realistic market demand. “We’re seeing strong full-price sell-through as a result,” Idol said. “Early indications show that our AUR [average unit retail] actually went up in Versace in the third quarter, driven by lower promotional activity and strategic pricing moves.”
Meanwhile, Jimmy Choo continues to navigate a challenging footwear market, with declining demand for heels post-pandemic. “We’d like a few more weddings to happen right now. We’d like people to dress up in a few more high heels,” Idol said, noting that demand for formal footwear remains sluggish.
Jimmy Choo reported $600 million in revenue for fiscal 2025, with a low single-digit negative operating margin, and expects $550 million in revenue and a slightly negative margin in fiscal 2026. Despite the short-term struggles, Jimmy Choo remains focused on expanding its accessories offering and casual footwear, areas where it has seen low-double-digit growth.
Overall, Capri Holdings is treating 2025 as a reset year, with cost-cutting measures — including store closures and workforce reductions — helping to stabilize margins. The company anticipates Michael Kors’ store fleet will shrink to 650 locations from 750, with 150 store renovations planned to elevate the brand’s full-price experience.
“We eliminated about $200 million in wholesale distribution this year to improve the quality of sales,” said Idol. “We would have liked to see that flow back into retail — it didn’t, but we’re sticking with it.”
Idol remains bullish on returning to revenue growth in 2026, betting that a more customer-aligned pricing strategy, a heritage-focused marketing shift and better product assortments will help Capri’s brands find their footing.
“It’s painful, but we’re keeping our heads down,” he said. “We know we’re making the right long-term moves.”
