Tapestry, the New York-based fashion conglomerate that owns Coach and Kate Spade, among others, announced on Thursday that it agreed to acquire Capri Holdings—Versace’s parent company, Jimmy Choo and Michael Kors – for about $8.5 billion.
While the deal is just the latest merger of top brands to impact the steadily consolidating luxury fashion industry, it may be the biggest effort yet by a US company to break the dominance of mega-powerful European fashion conglomerates like LVMH. (owner of 75 brands, including Louis Vuitton, Dior and Tiffany) and Kering (more than 18 brands, including Gucci, Balenciaga and Yves St. Laurent).
Whether Thursday’s news marks the creation of an American luxury entity that can take on the European titans remains to be seen. But the development will almost certainly impact a widening continental divide between how major luxury brands choose to engage with – and depend on – emerging technologies such as the blockchain.
After NFTs came into vogue in 2021, luxury brands across the board dipped their toes into the sector, with one-off NFT drops and metaverse pop-ups. But as the crypto market tanked the following year and the public perception of the industry souredluxury brands seemed to split into two main camps.
Some brands redoubled their blockchain efforts and began integrating them meaningfully into product lines, convinced of the staying power of the technology. Others moved to siled tech projects to increasingly sporadic activations removed from their brands’ core identities.
The former enthusiastic camp is overwhelmingly represented by European brands; the cautious ones, by American companies.
This year, for example, Gucci launched several limited edition jewelry lines in collaboration with Otherside, the metaverse gaming ecosystem from the creators of the Bored Ape Yacht Club, following Tiffany’s unofficial integration last summer with dominant NFT collection CryptoPunks.
Louis Vuitton launched an ultra-rare line of custom trunks tied to $41,000 NFTsand Dior premiered a line of designer sneakers equipped with NFC chips that came with on-chain digital twins. On the other side of the pond, American brands like Coach, Kate Spade and Michael Kors have opted to make pop-up appearances only occasionally at relatively low prices. low impact events like Metaverse fashion weekkeeping their product lines isolated from Web3 experiments.
The reasons for such disparity are probably many. First, the political and regulatory environment for crypto-affiliated products in Europe is both far more clearlyand far more welcomingthan it currently in the United States.
Furthermore, in the era of hyper-conglomerated luxury companies, it only takes the conversion of a few key leaders to change the course of dozens of leading brands. Bernard Arnault, CEO of LVMH, appears to have been brought aboard the block train by two of him ardently pro-crypto sons, Frederick and Alexandre.
Kering CEO François-Henri Pinault, meanwhile, has repeatedly praised emerging technologies such as the blockchain and the metaverse as history-changing game-changers.
As the U.S. luxury space continues to consolidate — and Thursday’s merger winner Tapestry looks to beat its European rivals in an increasingly zero-sum game — reliance on emerging technologies is poised to become a key differentiator among the shrinking number of players entering the trajectory. of the luxury industry.
Tapestry can choose to follow the lead of LVMH and Kering and put technology at the center of its brand identities in a more meaningful way. However, it may also choose not to further widen the growing gap in ethos between American and European luxury brands.
Either way, the conglomerate now faces a fork in the road; the path it chooses will likely influence the trajectory of American luxury for decades to come.