Tapestry and Capri Holdings end merger agreement amidst legal uncertainty

Both companies cited uncertainty around the legal process.

Tapestry, Inc., the luxury brand portfolio that includes Coach, Kate Spade, and Stuart Weitzman, has announced that it has mutually agreed with Capri Holdings Limited to terminate their proposed merger.

Both companies cited uncertainty around the legal process and the likelihood that it would not conclude by the set 10 February 2025, deadline as reasons for ending the merger agreement.

Tapestry CEO Joanne Crevoiserat said that this decision enables the company to focus on independent growth, highlighting the group's robust first-quarter results and a newly launched shareholder return program.

"Tapestry remains in a position of strength, with distinctive brands, an agile platform, passionate teams, and robust cash flow," she said. "We have significant runway ahead and are pleased to announce today an additional shareholder return program, as we believe there is no better investment at this time than our own stock.”

Tapestry outlined its plans for shareholder returns, including a a $2b share repurchase program, with part of the buybacks executed through an Accelerated Share Repurchase program (ASR), adding to the existing $800m authorised for repurchases.

Additionally, the group reaffirmed its $1.40 per share annual dividend for Fiscal 2025, with plans to increase dividends in line with earnings growth to achieve a 35-40% payout ratio.

Tapestry said it does not anticipate any acquisitions in the near term, choosing instead to strengthen Coach’s market position and ensure sustainable growth for Kate Spade.