Americans are avid consumers of shiny, expensive things. They make up a huge proportion of global luxury sales. Yet the country has never managed to nurture a luxury fashion conglomerate that can match the prestige of French groups like LVMH, Kering or Hermès. 

Tapestry, the company behind Coach, Kate Spade and Stuart Weitzman, is making a multibillion-dollar bet that it can change that. The New York fashion company is buying Capri Holdings, home to Versace, Jimmy Choo and Michael Kors, for $8.5bn including debt. Tapestry’s management said the “transformational” deal would create a US luxury powerhouse with combined revenues of more than $12bn across more than 75 countries.

The numbers tell a different story. Tapestry is taking on significant debt to acquire a company in which Michael Kors — a struggling and not particularly prestigious brand — generates about 70 per cent of group revenue. Versace, the only true high-end brand in Capri’s portfolio, accounts for just a fifth.