John Idol is done flirting with anything that looks like stepping back at Capri Holdings — and told investors the Versace, Michael Kors and Jimmy Choo parent was set to keep growing even with a $100 million hit seen in its Russian business.
“I am clearly back as the chairman of Capri and CEO of Capri and the CEO of Michael Kors, as it was previously,” Idol said at a Bank of America Securities investor conference on Wednesday in his first public comments since the company’s succession plan fell apart.
Joshua Schulman, fashion veteran and former Coach CEO was installed as head of Capri’s Michael Kors’ brand in August and was set to take over the top job at the company in September. But on Monday, Capri surprised the market with a C-suite switch-up that has Idol staying, picking the reins back up at Kors, and Schulman leaving (with a better than $8 million package and a non-compete of just six months).
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“Unfortunately, our previous individual who was in that role, Josh Schulman, did not work out for the company,” Idol said. “And that’s part of life, sometimes things work and sometimes things don’t work.”
Idol took pains to declare the management team strong, with executive leaders at Michael Kors brand having served an average of 15 years with the company. The CEO himself has led the company since 2003, taking it from a small designer business to a global force.
“Capri is in good hands, solid hands and we had laid out our strategic vision [before the pandemic started] and we’re executing against that,” he said.
And while Idol acknowledged he would move on eventually, he said there was no search now for a new CEO.
“I’m always working with the board on succession planning, not only in my position, but in other positions inside the company,” Idol said.
“I’m not going to be sitting here forever,” he said. “That is not the intent for me or for the board to do that. For the moment, we feel we’re in a good place.”
Idol said the company will update the market more fully on its plans for the business at an investor day in July, which will include some more information about how the Michael Kors brand will continue to be elevated.
“We’re very clear on how we’re going to accelerate the growth of that business,” he said, settling back easily into his role of having day-to-day charge of the brand. “We were less clear two years ago and we were more focused on just really repositioning the brand.”
That is work that will continue in a complicated luxury landscape, that has been reordered by the pandemic, technology shifting styles — and now war with Russia’s invasion of Ukraine.
Thomas Edwards, executive vice president, chief financial officer and chief operating officer, said the company’s $100 million exposure to Russia includes some direct sales to the country, which have stopped, as well as sales to Russians traveling abroad.
Capri is sticking by its guidance for fiscal 2022 and next year even without that contribution from Russia and Russian tourists.
“We’re seeing strength in other parts of the business, for instance in North America, that continues to shore up that brands and we’re very confident in this outlook,” Edward said, while stressing that the focus is really on finding peace in Ukraine and not business.
Capri’s projections has it posting profits of $6 a diluted share with sales of $5.6 billion this year and rising to profits of $6.60 a share and sales of $6.1 billion next year. (Sales for the year ended in March 2021 tallied $4.1 billion, reflecting a pandemic-led slowdown).
The company’s stock rebounded with a broader Wall Street rally on Wednesday, rising 8.1 percent to $50.38.
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