Capri Holdings (NYSE:CPRI) landed some bad news today, seeing its share price slump modestly in Tuesday afternoon’s trading. It’s all thanks to an expired waiting period that connects directly to the previously planned sale to Tapestry (NYSE:TPR) that would have seen the fashion brand become part of a larger fashion operation.
Tapestry, for its part, remained mum on the deal, noting that it wasn’t commenting on anything having to do with the “regulatory process.” Further, Tapestry assured anyone interested that it was “…currently working toward all required regulatory approvals,” as the whole deal was considered “highly complementary” in nature. Which is reasonable enough; the combined force of Tapestry and Capri Holdings would bring together Kate Spade, Coach, and Stuart Weitzman along with Jimmy Choo, Michael Kors and Versace, making an impressive conglomeration of luxury brands.
Bringing all those brands together under one umbrella should be helpful overall; after all, this represents a significant new player, and given that the luxury brands market is at least $200 billion in size, having a bigger player like this does suggest a better chance at seizing more market share. It may not even face too much trouble from regulators, especially given how much competition is involved. There are plenty of luxury brands out there, and considering how quickly consumers could pivot to lesser brands, that’s even more competition and a lot less problem for regulators.
Is Capri Holdings a Good Stock to Buy?
Analysts, however, are a bit more skeptical right now. With nine Hold ratings, Capri Holdings is considered a unanimous Hold by analyst consensus. Further, with an average price target of $53.57, Capri Holdings offers investors a meager 3.62% upside potential.
