August 16, 2023
By Anjali Kochhar
In a move set to reshape the luxury fashion landscape, Tapestry, the New York-based fashion conglomerate behind Coach and Kate Spade, has announced an $8.5 billion deal to acquire Capri Holdings—the parent company of Versace, Jimmy Choo, and Michael Kors. This merger not only signifies a consolidation trend in the luxury industry but also presents an American contender in the ring against dominant European fashion giants like LVMH and Kering.
However, the deal’s ripple effects extend beyond mere business maneuvers. The development brings into sharp focus a growing divide in how luxury brands approach emerging technologies like blockchain and the metaverse. Luxury brands initially dabbled in NFTs and the metaverse, but the 2022 crypto market slump separated them into two camps: those embracing blockchain integration into products and those cautiously sidelining tech projects.
Interestingly, European-owned brands, characterised by a more welcoming regulatory environment and visionary leaders, predominantly fall in the enthusiastic camp. Gucci, for instance, collaborated with Otherside for limited-edition jewellery lines, and Louis Vuitton and Dior released high-end products tied to NFTs and NFC chips respectively.
In contrast, American brands such as Coach, Kate Spade, and Michael Kors have taken a more reserved approach, participating occasionally in Web3 experiments. Political and regulatory factors in the United States contribute to this disparity, as well as the influence of key leaders in European luxury conglomerates like LVMH’s Bernard Arnault and Kering’s François-Henri Pinault, both of whom have been vocal supporters of emerging technologies.
With the acquisition of Capri Holdings, Tapestry now stands at a crossroads. It can emulate European counterparts by incorporating technology as a core brand identity, or it can diverge, further accentuating the divide between American and European luxury brands. Whichever path Tapestry chooses will profoundly shape the future of American luxury, as it competes with European counterparts in a high-stakes game for industry dominance.
As the luxury fashion landscape evolves, this merger emphasises that more than just business strategy is at play. The adoption of emerging technologies becomes a pivotal point of distinction between the shrinking number of players steering the course of the luxury industry. Tapestry’s choice will undoubtedly echo through decades to come, impacting the trajectory of American luxury in an increasingly tech-driven world.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.