Michael Kors Brand Gets Put Under Antitrust Microscope

Evan Clark
5 min read

In This Article:

Michael Kors might be the star brand in Tapestry Inc.’s $8.5 billion deal to buy Capri Holdings — but its light has clearly dimmed.

While Tapestry, which already owns Coach and Kate Spade, is waiting to put its turnaround skills to work at Michael Kors, a hearing over whether the mega deal will be allowed to go through at all highlighted just how much work there is to do.

More from WWD

The Federal Trade Commission, which sued to stop the buyout on anticompetitive grounds, called Michael Kors’ chief executive officer Cedric Wilmotte to the stand on Thursday and his testimony ultimately elicited an unusually raw take on the brand.

Wilmotte, who was questioned by both the FTC and counsel for the defense, said Michael Kors’ turnaround efforts so far have fallen short, that big parts of the brand’s reinvention plan are on hold and that Tapestry is better suited than Capri to complete the job.

The state of Michael Kors was already addressed in the hearing, with Capri CEO John Idol saying the brand was getting “squeezed from the top and from the bottom” in a competitive market. Separately, Tapestry CEO Joanne Crevoiserat, when asked if the brand was strong, diplomatically settled on, “The brand is iconic, execution has been — an opportunity, I would say.”

Wilmotte, in testimony on the stand and in unguarded thoughts revealed in private emails that the case brought to light, went farther.

“When I joined, clearly the brand was very challenged,” said Wilmotte, who became CEO of Michael Kors in April 2023.

Cedric Wilmotte

The month he moved into the corner office, Jefferies downgraded its rating on Capri stock to hold from buy and Wilmotte, in an email to his wife that was shown in court, said what he predicted had just happened and offered an unfiltered take on the business.

“U.S. is a disaster and this is all because of JI trying to maintain top line with discounting all day long versus refocusing on creating brand heat,” Wilmotte wrote, with “JI” seemingly referring to John Idol.

A Capri spokesperson did not reply to a WWD request for comment Thursday afternoon after the court went into closed session.

An internal analysis of Michael Kors’ weaknesses that were displayed in court showed the business suffered from:

  • brand fatigue;

  • dilution due to promotions;

  • an aging store fleet;

  • underpenetration in men’s;

  • a lack of clarity between the Michael Kors Collection and Michael Michael Kors, and

  • risk of employee fatigue.

Recommended Stories