Capri Holdings SWOT and PESTLE Analysis

Strength

1. Global fashion luxury group led by world-class management team and founder-designers: Capri Holdings Limited, comprising of three iconic international fashion brands; Versace, Jimmy Choo and Michael Kors, provides their customers with fashion luxury products having a reputation for world-class design and innovation. The company is well supported by their founder-designers Donatella Versace, Sandra Choi and Michael Kors and their respective design teams and Capri’s own experienced senior management team having strong creative and operational experience and successful track records. The management team has an average of 24 years of experience in the retail industry and 12 years of experience with Capri’s brands, with expertise in various segments including design, sales, marketing, public relations, merchandising, real estate, supply chain and finance. Donatella Versace’s unique design vision and 20 years of experience in fashion industry provides Versace brand unique advantage to maintain brand’s continued relevance. Sandra Choi, the Creative Director of Jimmy Choo brand, with her design team offers classic and timeless luxury products which are unique, naturally seductive and elegant. Launched 35 years ago by world-class designer Michael Kors, Michael Kors brand provides timeless and elegant luxury sophisticated accessories and apparel collections which has global recognitions and recipient of number of awards. Designs of the above three brands have been worn by famous celebrities and have a strong red-carpet presence.

2. Promising business strategy with trendsetting innovations: Capri’s business strategy deals with five strategic initiatives, with the goal of creating continued shareholder value by brand strengthening and focusing on profit boosting. Capri’s plans to utilize their expertise in accessories and footwear segment to hoist up their brands’ portfolio and enhance their distribution channel and e-commerce platform. The vast uncovered areas of Asia have a lot of potential to achieve good market share, and hence Capri’s strategy involves establishing their footprint in these fast-growing markets. Since Versace was acquired by Capri in 2018, hence Capri plans to give Versace a good momentum by increasing Versace’s global presence and develop their e-commerce business, leveraging their expertise in footwear and accessories segments and communication system. Capri plans to eventually grow Versace’s revenue business to $ 2 billion. Similarly, with target of reaching $ 1 billion revenue from Jimmy Choo business, Capri has increased the number of Jimmy Choo stores (150 to 200), with main focus on Asia. The firm plans to capitalize Jimmy Choo’s expertise in footwear segment to increase the market share and establish a revenue target of 50% from Jimmy Choo’s accessories products. With brand ambassador Kaia Gerber, Capri also plans to target younger customers by offering attractive men’s accessories and footwear range. With Michael Kors as their foundation brand, Capri plans to focus their expertise on innovation, design and style and continue to offer their customers with a vast range of luxury wearable products and footwear range and achieve revenue target of $ 5 billion in few years.

3. State-of-the-art omni-channel capabilities: Capri Holdings Limited has some of the world’s best digital platforms, along with world-class efficient distribution facilities together enhancing the capabilities of Capri’s omni-channel approach to sales. Omni-channel strategy of Capri Holdings Limited is nothing but providing their customers with seamless shopping experience, whether they are shopping online or offline. With recent acquisitions of Versace (December, 2018) and Jimmy Choo (November, 2017), the company has successfully capitalized on both of the brand’s exceptional omni-channel capabilities and best-in-class CRM system to grow their business and widen the global presence of each of the three brands. Capri’s success is also due to their world class distribution centres, including those in Venlo and Netherlands, which provides exceptional service to all the three brands worldwide. Capri has future plan to establish a new third party operated distribution centre in New Jersey and use omni-channel strategy to enhance their in-store pick up and order fulfilment capabilities.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Driving luxury fashion through sustainability: Sustainability has become an essential value for all the luxury brands innovation is a key way to become more responsible and sustainable. Capri closely monitors its production system and the conditions under which its products are produced and sourced and the brand actively seeks to maintain the optimum standards at all times. The company will also phase out the use of furs from its Versace products from the 2019 collections onward. However, its other brands such as Jimmy Choo and Michael Kors need to work more towards sustainable products and improve reporting standards. In 2017, Jimmy Choo had achieved the lowest rating, E-label from RankABrand in sustainability, and the brand needs to improve upon the same.

2. Ensuring adherence to various environmental and liability laws: Companies in fashion industry are not expected to create same level of pollution as that created by an oil company or a steel manufacturing company. Hence different industries have different environmental standards for different countries across the globe, which they should comply to in order to avoid becoming easy targets in that country. Even different states of a particular country may have different environmental laws and liability laws. For example, states like Texas and Florida of United States have different liability norms for environmental disasters and mishaps. Also, many European countries give reliefs to companies investing in and operating through renewable energy. Customers also show interests for the companies who have more ethical views and also think about the welfare of the environment. Various laws are made, which vary from country to country, to limit the amount of pollution and wastes created by imposing pollution tax/quota and fines. Capri may invest in green technologies and recycle waste materials in order to minimize environmental pollution and earn reputation and recognition in form of brand loyalty and new customers. Hence, before entering a country, Capri should have a proper environmental analysis on certain factors like environmental laws, pollution regulations, climatic conditions and attitudes of customers towards green products and renewable energy.