Versace’s two mistakes. Capri Holdings’ CEO John D. Idol identified them while commenting on the disappointing financial results for the last quarter of 2024. Versace and Jimmy Choo, the two brands up for sale, are depreciating in value, which could further stall potential buyers, while the group would, on the other hand, like to speed up the process.
Versace’s two mistakes
Versace’s revenue, during the quarter that ended Dec. 28, 2024 fell 15% to $193 million. The brand posted an operating loss of $21 million. If we look at the nine months, the brand’s revenue fell by 20%, with the operating margin being negative (-6.7%). An unsatisfactory performance, which is devaluing the worth of the brand in the midst of the sales process. In the conference call with analysts, Idol says that the brand’s decline in sales is attributable to two mistakes.
Focusing too much on the trend of quiet luxury, and reducing the number of low-priced products. “While elevating the assortment, we feel we have eliminated too many unique Versace items”, Idol said, according to Business Insider. According to Idol, reducing the number of entry-level products also contributed to the decline in sales. In the future, Versace will introduce “a broader product offering to target a broader base of luxury consumers“, explained the CEO of Capri Holdings.
The group
But it’s not just Versace that’s having problems. Revenue, during the third quarter of Capri Holdings’ fiscal year (October-December 2024) fell 11.6% to $1.26 billion. Michael Kors’ sales fell 12.1% to $909 million. Jimmy Choo’s were down 4.2% to $159 million. Capri’s quarter ended with a net loss of $547 million, down sharply from the $105 million profit the group made in the same period last year. The loss was caused by a non-cash write-down of $675 million.
Disappointment
“Our business struggled during the quarter, and we are disappointed with the results. We are re-evaluating our strategic initiatives to improve current sales’ performances”, commented Capri’s CEO, adding that he expects improvement during fiscal year 2026, and growth only starting the following fiscal year. The current one (ending March 2025) is expected to end with revenue at 4.4 billion: below the analysts’ average estimate of 4.5 billion. In the last 5 days, the stock has lost over 16%. Even worse, during the last 6 months, the stock has lost a third of its value.
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