What happened
Shares of Capri Holdings (CPRI 0.82%), the luxury retailer that owns the Michael Kors, Versace, and Jimmy Choo nameplates, were lower by around 13% at 3 p.m. ET on March 7. At the worst levels of the day to that point the stock was off by a touch over 14%. There were two big things going on.
So what
The first headwind Capri Holdings stock faced today was the broad market sell-off. By 2 p.m. ET the S&P 500 index was lower by more than 2%. When the mood on Wall Street is deeply negative, it is hard for any stock to withstand the onslaught. But this big-picture issue wasn't the only thing leaving a bad taste in investors' mouths with regard to Capri Holdings. The company also announced a management departure.
Image source: Getty Images.
This was no minor change. In August 2021, roughly six months ago, Capri Holdings hired Joshua Schulman to be the CEO of its Michael Kors nameplate. Schulman had previously overseen the Coach brand at Tapestry. He was expected to oversee Michael Kors for about a year, reporting directly to Capri Holdings' CEO John Idol. In September 2022 Schulman was scheduled to take over as CEO of Capri, with Idol becoming executive chairman. Today, however, the company announced that Schulman would be leaving the company and that Michael Kors has a talented management team in place, effectively not announcing a new head for that division. The big story here is that the company's succession plan has imploded.
Now what
There's no way to know what exactly led to Schulman's sudden departure. And if the former Michael Kors CEO wasn't slated to take on the reins of parent company Capri, the separation probably wouldn't be too big a deal. Indeed, current Capri CEO Idol is in his early 60s and, if the original hiring of Schulman is any indication, the board was looking to set up the company with a new generation of leaders. Now it is unclear if there will be a new search started or if Idol will simply stay put for longer, leaving the succession question unresolved. Regardless of whether today's stock price drop was driven by broader market sentiment or this top-level management shift, investors should be watching for the company's next steps on this issue.
