A new era for American luxury fashion?

Coach owner Tapestry $8.5 billion purchase of Capri Holdings brands Michael Kors, Versace and Jimmy Choo defines a new player in the global luxury sector. But is it enough to compete in the same league as LVMH and Kering?

Big fashion just got bigger. The acquisition of Capri Holdings by multinational luxury fashion holding Tapestry will create an American fashion giant that — while still not quite as large as its European competitors — will be better positioned to compete in the luxury market. It brings together six fashion brands: Tapestry's Coach, Kate Spade and Stuart Weitzman and Capri's Versace, Jimmy Choo and Michael Kors.

Together, the company will have the size and scale to reach more customers across the globe and better compete in the luxury market, as stated by Tapestry CEO Joanne Crevoiserat. She said the combination pulls together "six iconic brands" that have a presence in more than 75 countries and drive over $12 billion in annual revenue.

In a CNBC interview, Crevoiserat said the acquisition will help Tapestry reach a broader base of customers across ages and incomes. Michael Kors draws younger, more diverse shoppers, and Versace and Jimmy Choo attract wealthier customers.

Tapestry’s strategic move is not only about numbers — it’s about positioning. 

For years, American luxury brands have been overshadowed by their European counterparts, especially brands under the LVMH and Kering umbrellas. Europe-based brands like Christian Dior, Balenciaga, Gucci, and Saint Laurent, have set the gold standard in luxury fashion. This merger is a clear statement from Tapestry: American luxury is ready to compete on the global stage.

Joanne Crevoiserat, the CEO of Tapestry, emphasized the financial and strategic potential of the merger, noting that it offers an opportunity to “deepen engagement with luxury customers on the high end.” The acquisition is expected to expand Tapestry’s footprint in Europe, the Middle East, and Africa, while Capri’s brands will benefit from increased exposure in Asia.

Though still much smaller than European luxury mega-conglomerates LVMH and Kering, it's a big move for the U.S. luxury market.