What changed in this filing

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Item 1. Business

2021-05-26 compared with 2020-07-08 · 133 added, 84 removed, 234 unchanged (48% of the section changed)

Capri Holdings Limited (“Capri”) is a global fashion luxury group, consisting of iconic brands that are industry leaders in design, style and craftsmanship.

Capri Holdings Limited (“Capri”) is a global fashion luxury group, consisting of iconic brands that are industry leaders in design, style and craftsmanship, led by a world-class management team and renowned designers.

Our brands cover the full spectrum of fashion luxury categories, including women’s and men’s accessories, footwear and ready-to-wear, as well as wearable technology, watches, jewelry, eyewear and a full line of fragrance products.

Our goal is to continue to extend the global reach of our brands while ensuring that they maintain their independence and exclusive DNA.

The Versace brand has long been recognized as one of the world’s leading international fashion design houses and is synonymous with Italian glamour and style.

Founded over 40 years ago in Milan, Italy, Versace is known for its iconic and unmistakable style and unparalleled craftsmanship.

Over the past several decades, Versace has grown globally from its roots in haute couture, expanding into the design, manufacturing, distribution and retailing of ready-to-wear, accessories, footwear and home furnishings businesses.

Versace distributes its products through a worldwide distribution network which includes boutiques in some of the world’s most glamorous cities.

In addition, certain categories, such as jeans, fragrances, watches and eyewear are produced under licensing agreements.

The Jimmy Choo brand, founded over 20 years ago, enjoys a leading position in the luxury footwear market and an expanding presence in the luxury accessories space.

Since its inception in 1996, Jimmy Choo has offered a distinctive, glamorous and fashion-forward product range, enabling it to develop into a leading global luxury accessories brand, whose core product offering of women’s luxury shoes is complemented by accessories, including handbags, small leather goods, scarves and belts, as well as a men’s luxury shoe and an accessory business.

Our Versace brand has long been recognized as one of the world’s leading international fashion design houses and is synonymous with Italian glamour and style.

Founded in 1978 in Milan, Versace is known for its iconic and unmistakable style and unparalleled craftsmanship.

Over the past several decades, the House of Versace has grown globally from its roots in haute couture, expanding into the design, manufacturing, distribution and retailing of ready-to-wear, accessories, footwear, eyewear, watches, jewelry, fragrance and home furnishings businesses.

Versace’s design team is led by Donatella Versace, who has been the brand’s artistic director for over 20 years.

Versace distributes its products through a worldwide distribution network, which includes boutiques located in the world’s most glamorous cities, its e-commerce site, as well as through the most prestigious department and specialty stores worldwide.

Our Jimmy Choo brand offers a distinctive, glamorous and fashion-forward product range, enabling it to develop into a leading global luxury accessories brand, whose core product offering is women’s luxury shoes, complemented by accessories, including handbags, small leather goods, scarves and belts, as well as a growing men’s luxury shoes and accessory business.

In addition, certain categories, such as fragrances and eyewear, are produced under licensing agreements.

The Michael Kors brand was launched almost 40 years ago by Michael Kors, whose vision has taken it from its beginnings as an American luxury sportswear house to a global accessories, footwear and apparel company with a presence in over 100 countries through company-operated retail stores and e-commerce sites, leading department stores, specialty stores and select licensing partners.

Jimmy Choo’s design team is led by Sandra Choi, who has been the Creative Director for the brand since its inception in 1996.

Jimmy Choo products are unique, instinctively seductive and chic.

The brand offers classic and timeless luxury products, as well as innovative products that are intended to set and lead fashion trends.

Jimmy Choo is represented through its global store network, its e-commerce sites, as well as through the most prestigious department and specialty stores worldwide.

Our Michael Kors brand was launched 40 years ago by Michael Kors, whose vision has taken the Company from its beginnings as an American luxury sportswear house to a global accessories, footwear and apparel company with a global distribution network that has presence in over 100 countries through Company-operated retail stores and e-commerce sites, leading department stores, specialty stores and select licensing partners.

Michael Kors is a highly recognized luxury fashion brand in the Americas and Europe with growing brand awareness in other international markets.

Michael Kors features distinctive designs, materials and craftsmanship with a jet-set aesthetic that combines stylish elegance and a sporty attitude.

Michael Kors offers three primary collections:

the Michael Kors Collection luxury line, the MICHAEL Michael Kors accessible luxury line and the Michael Kors Mens line.

The Michael Kors Collection establishes the aesthetic authority of the entire brand and is carried in many of our Michael Kors retail stores, our Michael Kors e-commerce sites, as well as in the finest luxury department stores in the world.

Our accessible luxury line MICHAEL Michael Kors has a strong focus on accessories, in addition to offering footwear and apparel and is carried in all of our Michael Kors lifestyle stores, as well as leading department stores throughout the world.

We also continue to develop our Michael Kors Mens business in recognition of the significant opportunity afforded by our Michael Kors brand’s established fashion authority.

In addition, certain categories, such as watches, jewelry, fragrances and eyewear are produced under product and geographic licensing arrangements.

We operate in three reportable segments, which are as follows:

The Michael Kors Collection establishes the aesthetic authority of the entire brand and is carried by many of our retail stores, our e-commerce sites, as well as in the finest luxury department stores in the world.

MICHAEL Michael Kors has a strong focus on accessories, in addition to offering footwear and apparel, and addresses the significant demand opportunity in accessible luxury goods.

We have also been developing our men’s business in recognition of

the significant opportunity afforded by the Michael Kors brand’s established fashion authority and the expanding men’s market.

Taken together, our Michael Kors collections target a broad customer base while retaining our premium luxury image.

We operate in three reportable segments as follows:

• Versace — accounted for approximately 18% of our total revenue in Fiscal 2021 and includes worldwide sales of Versace products through 210 retail stores (including concessions) and e-commerce sites, through 868 wholesale doors (including multi-brand stores), as well as through product and geographic licensing arrangements.

• Jimmy Choo — accounted for approximately 10% of our total revenue in Fiscal 2020 and includes worldwide sales of Jimmy Choo products through 226 retail stores (including concessions) and e-commerce sites, through 554 wholesale doors, as well as through product and geographic licensing arrangements.

• Jimmy Choo — accounted for approximately 10% of our total revenue in Fiscal 2021 and includes worldwide sales of Jimmy Choo products through 227 retail stores (including concessions) and e-commerce sites, through 450 wholesale doors (including multi-brand stores), as well as through product and geographic licensing arrangements.

• Michael Kors — accounted for approximately 72% of our total revenue in Fiscal 2021 and includes worldwide sales of Michael Kors products through 820 retail stores (including concessions) and e-commerce sites, through 2,852 wholesale doors, as well as through product and geographic licensing arrangements.

In addition to these reportable segments, we have certain corporate costs that are not directly attributable to our brands and, therefore, are not allocated to segments.

Such costs primarily include certain administrative, corporate occupancy and information systems expenses, including Enterprise Resource Planning (“ERP”) system implementation costs.

Such costs primarily include certain administrative, corporate occupancy, shared service and information systems expenses, including Enterprise Resource Planning (“ERP”) system implementation costs.

In addition, certain other costs are not allocated to segments, including restructuring and other charges (including transition costs related to our recent acquisitions), impairment costs and COVID-19 related charges.

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We operate in the global personal luxury goods industry.

The personal luxury goods market grew at a 5% rate over the past 20 years, with more recent growth driven by stronger Chinese demand from both international and local consumers and demographic and socioeconomic shifts resulting in younger consumers purchasing more luxury goods.

The personal luxury goods market grew approximately 7% in 2019 despite growing geopolitical tensions, such as trade tensions between the United States and China, Brexit and protests in Hong Kong.

Growth in 2020 is expected to be impacted by the COVID-19 outbreak and subsequent global recovery.

According to forecasts by Bain-Altagamma, the personal luxury goods market is expected to contract between 20% and 35% in 2020.

Bain-Altagamma forecasted a 10% growth rate from 2020 to 2025.

Accessories remains the largest and fastest growing personal luxury goods category, driven by leather goods and footwear.

Over the past several years, direct-to-consumer has been the fastest-growing channel, largely driven by the rapid and accelerating growth of the e-commerce channel, which is expected to represent 30% of personal luxury goods sales by 2025.

Consumer shopping preferences have continued to shift from physical stores to on-line shopping.

As the overall retail environment becomes increasingly omni-channel, with point of sales evolving into point of touch, we believe that increased customer engagement and tailoring merchandise to customer shopping and communication preferences are the key ingredients to growing market share.

We believe that our innovative and luxurious product offerings and customer engagement initiatives across all three brands position us to capitalize on the continued growth of the luxury accessories and footwear product categories, as they are among our primary product categories of focus, as well as to grow our sales in our other product categories, such as ready-to-wear where we now have a broader presence across both women’s and men’s offerings.

Through 2019, the personal luxury goods market grew at a 5% rate over the past 20 years, with more recent growth driven by stronger Chinese demand from both international and local consumers and demographic and socioeconomic shifts resulting in younger consumers purchasing more luxury goods.

Then, in 2020, due to the impact of the COVID-19 crisis, the personal luxury goods market declined 23%.

According to Bain studies* , the personal luxury goods market is predicted to increase at a 10% compound annual growth rate between 2020 and 2025, and will return to 2019 levels by the end of 2021 or in 2022.

Future growth will be driven by e-commerce, Chinese consumers and younger generations.

By 2025, Bain studies estimate over 30% of personal luxury goods sales will occur online, Chinese consumers will represent nearly half of total global personal luxury goods sales, and Gen Z and Gen Y combined will make up at least two-thirds of the market.

As the personal luxury goods market continues to evolve, Capri is committed to creating engaging luxury experiences globally.

In our view, increased customer engagement and tailoring merchandise to customer shopping and communication preferences are key to growing market share.

* Comprised of:

Bain – Altagamma Luxury Goods Worldwide Market Study, Spring 2021, May 17th 2021 update and Bain – Altagamma Luxury Goods Worldwide Market Study, Spring 2021 (Together, the “Bain studies”).

These studies were prepared by the Bain & Company and Altagamma and can be obtained free of charge or at a nominal cost by contacting Bain & Company’s media contacts at aliza.medina@bain.com or dan.pinkney@bain.com.

While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources.

Geographic Information

We generate revenue globally through our three reporting segments, as described above.

We generate revenue globally through our three reportable segments, as described above.

We sell our Versace, Jimmy Choo and Michael Kors products through retail and wholesale channels of distribution in three principal geographic markets:

the Americas (U.S., Canada and Latin America), EMEA (Europe, Middle East and Africa) and Asia.

the Americas (U.S., Canada and Latin America), EMEA (Europe, Middle East and Africa) and Asia (including Australia).

We also have wholesale arrangements pursuant to which we sell products to our geographic licensees.

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Jimmy Choo’s products have a strong red carpet presence and are often worn by global celebrities.

The Michael Kors brand was launched almost 40 years ago by Michael Kors, a world-renowned designer, who is responsible for conceptualizing and directing the design of our Michael Kors brand products.

The Michael Kors brand was launched 40 years ago by Michael Kors, a world-renowned designer, who is responsible for conceptualizing and directing the design of our Michael Kors brand products.

We believe that the Michael Kors brand name has become synonymous with luxurious fashion that is timeless and elegant, expressed through the brand’s sophisticated accessories and ready-to-wear collections.

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Capitalizing on the success of our accessories product category, we continue to further develop the accessories businesses for Jimmy Choo and Versace, bringing our accessories expertise, including our product category knowledge, our merchandising best practices and our substantial group buying power to these brands.

Our goal is to increase Versace’s accessories and footwear penetration from less than 35% of revenues in Fiscal 2020 to 60% of Versace’s revenues over time, and to increase Jimmy Choo's accessories penetration from less than 20% of revenues in Fiscal 2020 to 50% of Jimmy Choo’s revenues over time.

Our goal is to increase Versace’s women’s and men’s accessories and footwear penetration from less than 35% of revenues in Fiscal 2021 to 60% of Versace’s revenues over time, and to increase Jimmy Choo's women's accessories penetration from approximately 20% of revenues in Fiscal 2021 to 50% of Jimmy Choo’s revenues over time.

Exceptional Retail Store Footprint.

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Versace’s products are distributed worldwide through a global network of highly specialized stores, which average approximately 1,700 square feet.

In addition, we operate Versace e-commerce sites in the U.S., certain parts of Europe and China.

We operated 226 Jimmy Choo stores as of March 28, 2020, with approximately 85% of stores represented by the brand’s new global retail store format, which has been progressively rolled out around the world during the past several years.

In addition, we operate Versace e-commerce sites in the U.S., Europe and China (covering 85 countries worldwide).

We operated 227 Jimmy Choo retail stores as of March 27, 2021, in some of the most premier locations worldwide.

During Fiscal 2021, we designed a refresh to our existing retail store format and will begin to roll out this new concept in Fiscal 2022 to both new stores and existing stores.

Jimmy Choo retail stores, comprised of full-price stores and outlets, average approximately 1,400 square feet.

In addition, we operate Jimmy Choo e-commerce sites in the U.S., certain parts of Europe and Japan, and launched a localized site in China during Fiscal 2020.

Omni-channel developments continued during Fiscal 2020 with the successful roll out of in-store ordering at concessions across Europe and Japan.

In addition, we operate Jimmy Choo e-commerce sites in the U.S., certain parts of Europe, Japan and have a localized site in China.

We operated 820 Michael Kors stores as of March 27, 2021 with four primary retail store formats:

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We have omni-channel capabilities from best-in-class digital platforms to state-of-the-art distribution facilities globally, which we leverage across businesses.

As part of our plan to continue to implement omni-channel capabilities throughout our businesses, we have begun leveraging our world class distribution centers, including in Venlo, Netherlands and Teterboro, New Jersey, to serve all three brands.

Strong Relationships with Premier Department Stores .

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These relationships enable us to access large numbers of our key consumers in a targeted manner.

Our “shop-in-shops” have specially trained staff, as well as customized fixtures, wall casings, decorative items, and flooring, and provide department store consumers with a more personalized shopping experience than traditional retail department store configurations.

Our “shop-in-shops” have specially trained staff, as well as customized fixtures, wall casings, decorative items, flooring and provide department store consumers with a more personalized shopping experience than traditional retail department store configurations.

We have engaged with our wholesale customers on various initiatives and have continued to enter into innovative supply chain partnerships designed to increase the speed at which our luxury fashion products reach the ultimate consumer.

We plan to increase Versace’s and Jimmy Choo’s presence in luxury department stores and for Michael Kors, we have continued to strategically reduce shipments with the intent to drive more full-price sell throughs in the wholesale channel.

We plan to increase Versace’s and Jimmy Choo’s presence in certain luxury department stores, and for Michael Kors, we have continued to strategically reduce shipments with the intent to drive more full-price sell through in the wholesale channel.

Business Strategy

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There are five strategic initiatives that we will focus on to achieve this goal.

First, we plan to build on Versace’s luxury runway momentum.

Second, we will enhance Versace’s powerful and iconic communications messaging.

First, we plan to build on Versace’s luxury runway momentum and capitalize on our iconic brand codes.

Second, we will enhance Versace’s powerful and storied marketing.

Third, we plan to increase Versace’s global footprint from 210 stores to 300 retail stores.

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We plan to continue to implement our growth strategies for Jimmy Choo, with a goal of reaching $1 billion in revenues over time.

Since the acquisition, we have grown Jimmy Choo’s retail store base from 150 stores to over 200 stores and are targeting to expand the Jimmy Choo retail footprint to 300 stores globally, with an emphasis on growth in Asia.

Maintaining our leadership in footwear for Jimmy Choo remains a top priority, and we plan to accelerate footwear growth by continuing to expand the strategic fashion active category.

In addition, we plan to continue increasing our presence in the accessories product category by expanding the breadth of new collection offerings, focusing on visual merchandising and increased marketing, with a goal of growing the accessories business to 50% of Jimmy Choo's revenues.

Our marketing campaign, featuring Jimmy Choo’s first global brand ambassador, model Kaia Gerber, aims to attract a younger customer, while simultaneously highlighting our new active footwear and accessories products, in addition to continuing to showcase our core luxury women’s fashion footwear.

To achieve this goal, we plan to expand Jimmy Choo’s distribution by accelerating e-commerce and omni-channel developments and increasing our global retail footprint to 300 retail stores in the most fashionable shopping destinations around the world.

We also have a significant opportunity to increase women’s accessories to approximately 50% of Jimmy Choo’s revenue by expanding the breadth of new collections.

At the same time, we plan to continue to grow footwear sales, in part by expanding our fashion active and casual offerings.

Continue to leverage the strength of our Michael Kors brand, which remains the foundation for our fashion luxury group.

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We have set targets to be 100% carbon neutral in our direct operations and to source 100% of energy for our owned and operated facilities from renewable sources by 2025.

Building on our net zero carbon emissions commitment, and in an effort to deliver on the goals of the Paris Agreement, we will also commit to set emissions reduction targets across our operations and supply chain with the Science Based Targets initiative by 2021.

Building on our net zero carbon emissions commitment, and in an effort to deliver on the goals of the Paris Agreement, we will also set emissions reduction targets across our operations and supply chain with the Science Based Targets initiative by the end of calendar 2022.

We have additionally committed to, and have already been working towards, a number of important initiatives, including:

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• Sourcing at least 95% of our leather from certified tanneries by 2025

• Furthering diversity and inclusion within the organization, including through our new Global D&I Council

• Furthering diversity and inclusion within the organization, including through our Global D&I Council

• Supply chain empowerment programs focused on human rights and fair wages to be implemented in line with the United Nations Framework for Corporate Action on Workplace Women’s Health and Empowerment by 2025

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Generally, Versace’s haute couture retails up to $100,000, ready-to-wear retails from $270 to $9,500, accessories retail from $85 to $3,500 and footwear retails from $300 to $2,500.

Certain product categories, such as Versace Jeans Couture, eyewear, fragrances, jewelry and watches are produced under product licensing agreements.

Swinger SA is the exclusive licensee for Versace Jeans Couture, Luxottica is the exclusive licensee for Versace eyewear, Euroitalia is the exclusive licensee for Versace fragrances, Samra International is the exclusive licensee for Versace jewelry, and Vertime is the exclusive licensee for Versace watches.

Generally, Versace Jeans Couture retail from $75 to $2,000, Versace eyewear retails from $200 to $500, Versace fragrances retail from $75 to $400, Versace jewelry retails from $500 to $7,500, and Versace watches retail from $500 to $3,500.

Jimmy Choo is a leading global luxury accessories brand and offers a distinctive, glamorous and fashion-forward product range, whose core product offerings are women’s luxury shoes, complemented by accessories, including handbags, small leather goods, scarves and belts, as well as a growing men’s luxury shoes and accessories business.

Generally, Jimmy Choo women’s luxury shoes retail from $400 to $5,500, accessories retail from $450 to $5,500 and men’s shoes retail from $200 to $2,500.

Certain product categories, such as Versace Jeans Couture, eyewear, fragrances, jewelry, watches, and home furnishings, are produced under product licensing agreements.

Swinger SA is the exclusive licensee for Versace Jeans Couture, Luxottica is the exclusive licensee for Versace eyewear, Euroitalia is the exclusive licensee for Versace fragrances, Samra International is the exclusive licensee for Versace jewelry, Vertime is the exclusive licensee for Versace watches and Poltrona Frau is the exclusive licensee for Versace home furnishings.

Generally, Versace Jeans Couture retail from $50 to $2,000, Versace eyewear retails from $200 to $500, Versace fragrances retail from $70 to $400, Versace jewelry retails from $500 to $7,500, Versace watches retail from $500 to $3,500 and Versace home furnishings, which includes a variety of products, generally retails from $700 to $52,000.

Generally, Jimmy Choo women’s and men's luxury shoes retail from $400 to $5,500 and accessories retail from $200 to $4,500.

Certain product categories, such as Jimmy Choo fragrances and eyewear, are produced under product licensing agreements.

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Certain product categories, including watches, jewelry, eyewear and fragrance, are produced under product licensing agreements.

Fossil is our exclusive licensee for Michael Kors watches and jewelry, including our Michael Kors ACCESS smartwatches introduced in Fiscal 2017 and our fine jewelry line introduced in Fiscal 2019.

Fossil is our exclusive licensee for Michael Kors watches and jewelry, including our Michael Kors ACCESS smartwatches and our fine jewelry line.

Luxottica is our exclusive licensee for Michael Kors distinctive eyewear inspired by our collections.

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Our brands introduce their new collections annually with fashion shows and other fashion events.

These fashion events, in addition to celebrity red carpet dressing moments, generate extensive domestic and international media and social coverage.

These fashion events, in addition to celebrity red carpet dressing moments, generate extensive domestic and international media and social media coverage.

The Versace and Michael Kors semi-annual runway shows and Jimmy Choo celebrity placements generate extensive media coverage.

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We believe our renowned brand founders, as well as our high-profile brand ambassadors and well-known social media influencers across our marketing programs helps expand brand awareness and drive cultural relevance.

During Fiscal 2020, Versace's Spring 2020 show celebrated the 20th anniversary of the legendary moment in fashion history when the iconic jungle print dress worn by Jennifer Lopez helped inspire Google Images' search function.

To close the show, Jennifer Lopez wore a re-imagined version of the tropical print dress she wore to the 2000 Grammys.

The reviews, press coverage and social media generated from the show continue to expand the global reach of Versace.

Kaia Gerber continues to be the face of Jimmy Choo.

With her timeless beauty and fashion pedigree, Kaia’s authenticity transcends generations and is the perfect representation of the dynamic energy of the Jimmy Choo brand.

Bella Hadid remains the face of MICHAEL Michael Kors.

Bella accentuates the lifestyle, attitude and mood that is quintessentially jet-set.

The imagery reflects the speed, energy and optimism that are the hallmarks of our Company.

In Fiscal 2021, we recognized approximately $137 million in advertising and marketing expenses globally.

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The vast majority of Versace’s production is located in Italy.

The remaining production occurs in Tunisia, elsewhere in Europe and a small portion is produced in Asia.

Jimmy Choo products are also manufactured by independent third-party manufacturing contractors.

The remaining production occurs elsewhere in EMEA and a small portion is produced in Asia.

Jimmy Choo products are manufactured by independent third-party manufacturing contractors and our recently acquired Italian atelier and shoe manufacturer Alberto Gozzi S.r.L ("Gozzi").

Most of Jimmy Choo’s products are produced by specialists in Italy, supported by other factories across Europe, with a small portion produced in Asia.

Jimmy Choo has a product development facility in Florence.

During Fiscal 2020, we acquired Italian atelier and shoe manufacturer Alberto Gozzi S.r.L.

In the immediate future, the factory will primarily develop and produce shoes for Jimmy Choo.

Jimmy Choo typically purchases finished goods and does not purchase raw materials, except for product development purposes.

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This multi-supplier strategy provides specialist skills, scalability, flexibility and speed to market, as well as diversifies risk.

In Fiscal 2020 and Fiscal 2019, one third-party agent sourced approximately 26% and 24% of Michael Kors finished goods purchases, respectively, based on unit volume.

Michael Kors’ largest manufacturing contractor, who produces its products in Asia and who Michael Kors has worked with for over 10 years, accounted for the production of approximately 20% of its finished products, based on dollar volume in Fiscal 2020.

In Fiscal 2021 and Fiscal 2020, one third-party agent sourced approximately 26% of Michael Kors finished goods purchases, based on unit volume.

Michael Kors’ largest manufacturing contractor, who produces its products in Asia and who Michael Kors has worked with for approximately 20 years, accounted for the production of approximately 18% of its finished products, based on dollar volume in Fiscal 2021.

Nearly all of our Michael Kors products were produced in Asia in Fiscal 2021.

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—“Risk Factors” — “We primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods, which poses legal, regulatory, political and economic risks to our business operations.”

Our future manufacturing and sourcing strategy includes creating a manufacturing center of excellence in Italy, as well as purchasing luxury manufacturing facilities in Italy to support all of our brands, to secure capacity and improve expertise in development and delivery.

Our future manufacturing and sourcing strategy includes purchasing luxury manufacturing facilities in Italy to support all of our brands, pursuing manufacturing synergies across brands and securing capacity and improving our expertise in development and delivery.

While the fashion design process will remain independently managed by each of our brands, we believe that creating a manufacturing center of excellence, which would combine all functions that support our design teams, from leather and hardware purchases to investment in machinery and systems, will create synergies and efficiencies for our global fashion luxury group.

Versace owns a central warehouse in Novara, Italy, managed by a third party, which acts as a global hub for Versace’s primary operations.

Versace also has a leased warehouse near Novara operated by the same third party, which serves as a distribution point for other Versace lines.

From these warehouses, products are shipped to regional warehouses that are operated by third parties in New Jersey, Hong Kong, Beijing and Tokyo, and supports the Versace retail and e-commerce businesses.

Versace also has a leased warehouse near Novara operated by the same third party, which serves as a distribution point for e-commerce operations and reverse logistics.

From these warehouses, products are shipped to regional warehouses that are operated by third parties.

The main regional warehouses are located in New Jersey, Hong Kong, Beijing and Tokyo, and support the Versace retail and e-commerce businesses.

The e-commerce distribution for the other regions is conducted through third party providers in Columbus, Ohio and Beijing, China.

Versace’s wholesale business is mainly serviced from three central warehouses located in Italy, the United States and Japan.

Jimmy Choo's primary distribution facility is in Switzerland.

Jimmy Choo's primary distribution facility is our Company-owned and operated distribution facility in the Netherlands.

From there, products are shipped to regional warehouses in the United Kingdom, the United States, Canada, China, Hong Kong, South Korea, Japan and United Arab Emirates, largely supporting the Jimmy Choo retail and e-commerce businesses.

Shipments to wholesale customers globally are made from Switzerland and the United States, with some further local fulfillment.

All of the distribution facilities utilized by Jimmy Choo are operated by third parties and are shared with other businesses.

Shipments to wholesale customers globally are made from the Netherlands and the United States, with some further local fulfillment.

All of the distribution facilities utilized by Jimmy Choo are operated by third parties and are shared with other unaffiliated businesses with the exception of our distribution facility in the Netherlands.

This flexible method reinforces the speed and efficiency of the supply chain and allows the business to deliver Jimmy Choo product and collections to market rapidly and in line with the industry’s fashion calendar.

Michael Kors primary distribution facility in the United States is the leased facility in Whittier, California, which is directly operated and services our Michael Kors retail stores, e-commerce site, and wholesale operations in the United States.

Michael Kors primary distribution facility in the United States is a leased facility in Whittier, California, which is directly operated and services our Michael Kors retail stores, e-commerce site and wholesale operations in the United States.

We also engage in omni-channel order fulfillment by filling online orders through our Michael Kors retail stores and through our click-and-collect service offerings.

Our primary Michael Kors distribution facility in Europe is our Company-owned and operated distribution facility in the Netherlands, which supports our European operations for our Michael Kors brand, including our European e-commerce sites.

We also have regional Michael Kors distribution centers in New Jersey and Canada, which are leased, as well as regional Michael Kors distribution centers in China, Hong Kong, Japan, South Korea and Taiwan, which are operated by third-parties.

We also have a regional Michael Kors distribution center in Canada, which is leased, as well as regional Michael Kors distribution centers in New Jersey, China, Hong Kong, Japan, South Korea and Taiwan, which are operated by third-parties.

Intellectual Property

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We also have applications pending for a variety of related trademarks, copyrights, designs and patents in various countries throughout the world.

As our worldwide usage of our material trademarks, copyrights, designs and patents continue to expand, we continue to strategically apply to register them in key countries where they are used.

As the worldwide usage of our material trademarks, copyrights, designs and patents continue to expand, we continue to strategically apply to register them in key countries where they are used.

We expect that our material intellectual property will remain in full force and effect for as long as we continue to use and renew them.

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As a result of COVID-19 and our need to significantly reduce our capital expenditures in order to protect our liquidity and cash flows, we temporarily suspended our ERP project.

The project has resumed as of the fourth quarter of Fiscal 2021.

“Risk Factors” — “A material delay or disruption in our information technology systems or e-commerce websites or our failure or inability to upgrade our information technology systems precisely and efficiently could have a material adverse effect on our business, results of operations and financial condition.”

Human Capital Management

At Capri Holdings, we strive to create workplaces where our employees and the workers across our supply chain thrive.

Through our benefits packages, learning and development programs, focus on diversity and inclusion, wellness programs and supply chain empowerment initiatives, we continue to make significant investments in our Capri community.

Employee Profile.

At the end of Fiscal 2021, 2020 and 2019, we had approximately 13,800, 17,000 and 17,800 total employees, respectively.

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Approximately 10,400 of our employees were engaged in retail selling and administrative positions and our remaining employees were engaged in other aspects of our business as of March 27, 2021.

As of March 28, 2020, we have 1,424 employees covered by collective bargaining agreements in certain European countries.

As of March 27, 2021, we have approximately 2,400 employees covered by collective bargaining agreements in certain European countries.

We consider our relations with both our union and non-union employees to be good.

Benefits and Compensation.

We maintain comprehensive benefits and compensation packages to attract, retain and recognize our employees.

Our health and welfare benefit program is designed to provide a wide range of benefits to meet the health care, financial and work/life needs of eligible employees.

Benefits include, among others, medical, dental and vision plans, life insurance, short and long-term disability coverage, retirement plans (with matching contributions where applicable), paid parental leave, gender reassignment coverage and fertility support benefits in the United States, and a corporate wellness program.

We also offer employees paid time off, including to volunteer with select charitable organization, to get the COVID-19 vaccine and to quarantine in accordance with government or health organization recommended quarantine guidelines (in addition to any COVID-19 mandated paid sick leave at the federal, state, or local level).

Employees are also entitled to discounts on our merchandise.

Learning and Development.

We honor our employees through our dedication to development.

A majority of our executives have participated in an executive leadership development program offered in partnership with the Center for Creative Leadership, and more than 800 of our people managers have participated in leadership development programs.

These programs are aimed at equipping our leaders with strategies to effectively navigate and drive change, and to build and strengthen cross-functional relationships.

All full-time employees also participate in a formal performance review process annually, and receive annual trainings on important topics including compliance, ethics and integrity, respect in the workplace and information security as a part of our efforts to maintain a safe, positive and inclusive work environment.

In Fiscal 2021, we also implemented diversity and inclusion trainings focused on unconscious bias, microaggressions and workplace diversity, sensitivity and inclusion.

Diversity and Inclusion.

Diversity and inclusion are embedded in our DNA.

We foster an inclusive environment where employees and customers of diverse backgrounds are respected, valued and celebrated.

We are proud of our commitment to diversity, equality and inclusion, and will continue to advance these principles through meaningful short and long term actions across the globe.

We recently appointed a Head of Diversity and Inclusion and established a Global Diversity and Inclusion Council, comprised of leaders across our brands focused on bringing Capri’s diversity and inclusion strategy to life.

Our commitment to diversity and inclusion is supported by three pillars:

Capri Culture - Our commitment to diversity extends beyond representation.

We are building an inclusive space where all employees have the opportunity to realize their full potential and excel, while contributing to our success in a meaningful way.

Capri Talent - Differences in ideas and experiences allow our Company to thrive.

We are attracting, advancing and advocating for a workforce that reflects the diversity of the world around us.

Capri Community - Through diversity and inclusion comes understanding and strength.

Our responsibility to promote equality is not just to those who work with us, but to our industry, the customers we serve and the communities around us.

In Fiscal 2021, we formed The Capri Holdings Foundation for the Advancement of Diversity in Fashion.

The Company has pledged $20 million to further the foundation’s mission of supporting diversity, inclusion and equality throughout the fashion industry.

Health and Safety .

Everyone working on behalf of our Company is entitled to work in a safe environment.

Capri’s global safe workplace program, which includes employee traveler and emergency response alerts, raises awareness and provides safety resources tailored for workers in different work environments – from our distribution centers to our retail stores.

In addition, as we continue to navigate the COVID-19 pandemic, we continue to prioritize the safety of our employees and our customers and to do our part to help stop the spread within our communities.

We enhanced health and safety protocols at our retail stores, distribution centers and corporate offices, adhered to social distancing measures and provided contact-free shopping opportunities when safe to do so.

Supply Chain Empowerment.

Our community extends beyond our direct employees and our corporate social responsibility program drives us toward greater engagement with our suppliers.

We are dedicated to conducting our operations throughout the world on principles of ethical business practice and recognition of the dignity of workers.

Through our Code of Conduct for Business Partners and Factory Social Compliance Program, we partner with our suppliers on important human rights, health and safety, environmental and compliance issues.

We face intense competition in the product lines and markets in which we operate from both existing and new competitors.

Our products compete with other branded products within their product category.

In varying degrees, depending on the product category involved, we compete on the basis of style, price, customer service, quality, brand prestige and recognition, among other bases.

In varying degrees, depending on the product category involved, we compete on the basis of style, price, customer service, quality, brand prestige and recognition, among others.

In our wholesale business, we compete with numerous manufacturers, importers and distributors of products like ours for the limited space available for product display.

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In addition, countries to which we ship our products may impose safeguard quotas to limit the quantity of products that may be imported.

We rely on free trade agreements and other supply chain initiatives in order to maximize efficiencies relating to product importation.

On May 10, 2019, the United States (“U.S.”) increased the sanction tariffs rate from 10% to 25% on $200 billion of imports of select product categories (Tranche 3), which includes handbags and travel goods from China, and effective September 1, 2019, a 10% tariff on an additional $300 billion of goods from China, including ready-to-wear, footwear and men’s products, went into effect.

We rely on free trade agreements and other supply chain initiatives in order to maximize efficiencies and cost savings relating to product importation.

For example, we have historically received benefits from duty-free imports on certain products from certain countries pursuant to the U.S.

Generalized System of Preferences ("GSP") program.

The GSP program expired on December 31, 2020.

If the GSP program is not renewed or otherwise made retroactive, we would experience significant additional duties and our gross margin could be negatively impacted.

Additionally, we are subject to government regulations relating to importation activities, including related to U.S.

Customs and Border Protection ("CBP"0) withhold release orders.

The imposition of taxes, duties and quotas, the withdrawal from or material modification to trade agreements and/or if CBP detains shipments of our goods pursuant to a withhold release order could have a material adverse effect on our business, results of operations and financial condition.

If additional tariffs or trade restrictions are implemented by the U.S.

or other countries, the cost of our products could increase which could adversely affect our results of operations and financial condition.

Additionally, we are subject to government regulations relating to both importation activities and product labeling, testing and safety.

Additionally, we are subject to government regulations relating to product labeling, testing and safety.

We maintain a global customs and product compliance organization to help manage our import and related regulatory activity.

Corporate Social Responsibility

In April 2020, we released our first group-wide corporate social responsibility strategy.

The report builds upon the initiatives that each of our brands has already been working on, and outlines our global strategy to achieve significant, measurable goals across a range of important environmental and social sustainability issues, including material sourcing, greenhouse gas emissions, water use, waste reduction, diversity and inclusion and philanthropic giving.

As a global fashion luxury group, we recognize the impact that our operations can have on the environment and the social well-being of others.

We have developed a corporate social responsibility strategy in order to drive positive change within our organization and our world.

Our Corporate Social Responsibility strategy outlines our global strategy to achieve significant, measurable goals across a range of important environmental and social sustainability issues, including material sourcing, greenhouse gas emissions, water use, waste reduction, diversity and inclusion and philanthropic giving.

See “Business Strategy” — “Execute on our corporate social responsibility strategy.”

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• Our Philanthropy – connecting the talents, energy and success of each of our brands to those in need around the world.

In arriving at the goals and objectives described in our report, we looked to the United Nations Sustainable Development Goals for insight, and also to align ourselves effectively with the work being done by governments, individuals and companies around the world.

We are committed to the goals outlined in our global corporate social responsibility strategy and are taking a number of actions in furtherance of these objectives including endorsing pledges and joining industry groups that align with our strategy.

A copy of our Corporate Social Responsibility report is available on our website at www.capriholdings.com/csr .

Available Information

Our investor website can be accessed at www.capriholdings.com .

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the SEC pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website under the caption “Financials” and then “SEC Filings” promptly after we electronically file such materials with, or furnish such materials to, the SEC.

No information contained on our website is intended to be included as part of, or incorporated by reference into, this Annual Report on Form 10-K.

Information relating to corporate governance at our Company, including our Corporate Governance Guidelines, our Code of Business Conduct and Ethics for all directors, officers, and employees, and information concerning our directors, Committees of the Board, including Committee charters, and transactions in Company securities by directors and executive officers, is available at our website under the captions “Governance” and “Financials” and then “SEC Filings.” Paper copies of these filings and corporate governance documents are available to shareholders free of charge by written request to Investor Relations, Capri Holdings Limited, 33 Kingsway, London, United Kingdom, WC2B 6UF.

Documents filed with the SEC are also available on the SEC’s website at www.sec.gov .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business