While fashion insiders continued to wonder over the abrupt switch at Capri Holdings — which has John Idol staying on as chief executive officer and his chosen successor Joshua Schulman leaving — Wall Street is settling into the change and maybe sensing opportunity.
Shares of Capri, which owns Michael Kors, Versace and Jimmy Choo, stabilized on Tuesday, rising 0.9 percent to $46.59 after dropping 15.2 percent on the unexplained C-suite change on Monday.
But that drop and leveling off had the company directionally following the broader market, where investors are still trying to figure the impact of Russia’s invasion of Ukraine.
Simeon Siegel, an analyst at BMO, said that while the management change “is worth asking about,” Carpi’s shares “are worth buying.”
Investing in Capri now might require a different kind of calculus, but the equation is familiar since the Idol playbook is so well known. He has been CEO of the company since 2003, successfully taking it public in 2011 and then setting it on an acquisition trail.
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“We believe investors had been excited for Mr. Schulman’s assumption of leadership and now await clarity around next steps,” Siegel said.
“In the near term, we’d expect increased volatility given the management about-face,” the analyst said. “However, and recognizing we do not know the back story, at face value, this appears to resemble the management transition at Ralph Lauren several years ago, and we continue to believe that, in the end, strong brands are generally stronger than the individuals leading them.”
That’s a reference to the start and stop at Ralph Lauren Corp. that saw Stefan Larsson succeed the namesake founder, then clash with him and move on, after a while to lead PVH Corp. (Schulman could well make a similar move as he leaves Capri with a payout of more than $8 million and a non-compete agreement of just six months).
Siegel noted that Capri’s shares “are now even less expensive than they were before, presumably without a change in fundamental trajectory, suggesting that European exposure notwithstanding, current levels represent compelling entry points.”
But with a land war in Europe and superpowers positioning for — well, whatever comes next — questions around just where Wall Street is headed is more nebulous than usual.
On Tuesday, many in fashion were rebounding after Monday’s rout.
The gainers included Mytheresa, up 10.8 percent to $12.75; Adidas, 8.1 percent to 188.50 euros; Macy’s Inc., 8.1 percent to $23.16; American Eagle Outfitters Inc., 6.4 percent to $17.57; Victoria’s Secret & Co., 6.1 percent to $44.93; Urban Outfitters Inc., 5.9 percent to $25.38; Kontoor Brands Inc., 5.7 percent to $42.07; Poshmark Inc., 5.2 percent to $12.64, and Warby Parker Inc., 5.1 percent to $24.48.
The Dow Jones Industrial Average slipped 0.6 percent, or 184.74 points, to 32,632.64.
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