What's happening

Shares of Capri Holdings (NYSE:CPRI), the parent company of Michael Kors and other upscale brands, were down sharply on Thursday on growing investor concerns about the effects of the coronavirus outbreak. 

As of 2:30 p.m. EST, Capri Holdings' shares were down about 8.6% from Wednesday's closing price. 

So what

Investors may have largely digested the impact to Capri Holdings (and its rivals) from the outbreak of novel coronavirus in Asia, but concerns are growing about Europe as well.

Northern Italy, with its network of small-scale shoe and leather-goods manufacturers, is a critical part of fashion's global supply lines, particularly for brands like Capri's Jimmy Choo. That region has been hit hard by the virus, with cities like Milan largely shut down for the time being. The government of Spain, another center of shoe manufacturing, today advised businesses to shut down and send employees home if signs of the virus appear. 

3 leather handbags are shown in a store window.

Image source: Getty Images.

Moreover, there are rising concerns about the effects of the outbreak on retail foot traffic all over the world. Those concerns are leading department-store buyers to reassess their orders for the coming months, and that in turn is -- rightly -- leading investors to worry that the virus's effects on Capri Holdings' top line could be worse than feared.

Now what

Capri cut its full-year guidance during its third-quarter earnings call in February on concerns about the coronavirus in Asia. For the fiscal year that will end on March 31, it reduced its revenue target by $100 million and cut its earnings-per-share expectation by $0.05 to $0.40.

Now that the virus has spread beyond Asia, another downward revision could be on the way.

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