Watch Capri stocks after CEO returns – WWD
As fashion insiders continued to question Capri Holdings’ abrupt change – which has John Idol remaining as CEO and his chosen successor Joshua Schulman departing – Wall Street is settling into change and smelling perhaps an opportunity.
Shares of Capri, which owns Michael Kors, Versace and Jimmy Choo, stabilized on Tuesday, rising 0.9% to $46.59 after falling 15.2% following Monday’s unexplained C-suite change.
But this decline and stabilization has caused the company to directionally track the broader market, where investors are still trying to understand the impact of Russia’s invasion of Ukraine.
Simeon Siegel, an analyst at BMO, said that while the management change “was worth questioning”, Carpi’s shares were “worth buying”.
Investing in Capri now may require a different kind of calculation, but the equation is familiar since the Idol playbook is so well known. He’s been the company’s CEO since 2003, successfully floated it on the stock exchange in 2011, and then launched it on an acquisition trail.
“We believe investors have been excited about Mr. Schulman’s assumption of the role and are now awaiting clarity on next steps,” Siegel said.
“In the near term, we expect increased volatility given management’s about-face,” the analyst said. “However, and acknowledging that we don’t know the story, at first glance it appears to resemble the management transition at Ralph Lauren several years ago, and we continue to believe that ultimately strong brands are usually stronger than the individuals to lead them.”
It’s a reference to the start and stop of Ralph Lauren Corp. which saw Stefan Larsson take over from the namesake founder, then clash with him and move on, after some time leading PVH Corp. (Schulman may well make a similar move by leaving Capri with a payout of more than $8 million and a non-compete agreement of just six months).
Siegel noted that Capri shares “are now even cheaper than they were before, likely with no change in fundamental trajectory, suggesting that despite European exposure, current levels represent compelling entry points.”
But with a ground war in Europe and superpower positioning for – well, whatever happens next – questions about where Wall Street is headed are more nebulous than usual.
On Tuesday, a lot of fashion was bouncing back from Monday’s rout.
Gainers included Mytheresa, up 10.8% at $12.75; Adidas, 8.1% to 188.50 euros; Macy’s Inc., 8.1 percent at $23.16; American Eagle Outfitters Inc., 6.4% to $17.57; Victoria’s Secret & Co., 6.1% to $44.93; Urban Outfitters Inc., 5.9% to $25.38; Kontoor Brands Inc., 5.7% to $42.07; Poshmark Inc., 5.2% to $12.64, and Warby Parker Inc., 5.1% to $24.48.
The Dow Jones Industrial Average slipped 0.6%, or 184.74 points, to 32,632.64.
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