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Michael Kors Holdings Limited

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Shares of Michael Kors have risen and outpaced the industry in a year. The company has been constantly deploying resources to expand product offerings, build shop-in-shops, and upgrade distribution infrastructure. This along with the Runway 2020 plan, cost containment efforts, inventory management, focus on e-commerce platform and accretive buyouts bode well. Strategic acquisitions such as that of Jimmy Choo for $1.35B and Versace for $2.12B strengthens Michael Kors’ ambition to become a global luxury player. Management stated that the addition of Versace will help augment group’s revenues to $8 billion in the long term. However, the buyout is likely to dilute earnings per share in the high-single digits in fiscal 2020 but is expected to be accretive in the low-single digits in fiscal 2021 and again in high-single digits in fiscal 2022. Upon the completion of the buyout, Michael Kors will be renamed as Capri Holdings Limited.

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