Tapestry, the style firm that owns Coach and Kate Spade, stated on Thursday it had acquired Capri Holdings, the mother or father of Versace and Michael Kors, for about $8.5 billion, an indication of consolidation within the luxurious market.

Capri shareholders will obtain $57 per share in money. Combined, the 2 conglomerates account for $12 billion in income.

The deal is a partnership of two giant American corporations with acquainted luxurious manufacturers coming collectively as high-end retailers search for progress, amid indicators that U.S. shoppers are pulling again on discretionary spending.

Tapestry and Capri collectively embrace six manufacturers, together with Jimmy Choo and Stuart Weitzman.

For Tapestry, the acquisition will assist increase its attain in Europe, the Middle East and Africa, and it will give Capri’s manufacturers extra publicity in Asia.

The chief executives of each corporations confused that the mixture would deliver their purses, footwear and attire to a broader shopper base throughout 75 international locations and allow them to faucet into extra assets. The corporations stated the merger additionally offered a possibility to extend their direct-to-consumer enterprise and save them $200 million in working and supply-chain prices inside three years.

Bringing the six manufacturers collectively “creates a new powerful global luxury house, unlocking a unique opportunity to drive enhanced value for our consumers, employees, communities, and shareholders around the world,” Joanne Crevoiserat, chief government of Tapestry, stated in an announcement.

“By joining with Tapestry, we will have greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands,” John D. Idol, the Capri chief government, stated in an announcement.

Tapestry’s inventory was down 3 % earlier than the market open on Thursday. Capri rose practically 60 %. On Wednesday, earlier than the news was introduced, Capri’s inventory closed at just below $35.

“The potential deal comes at a time when luxury is facing something of a slowdown, especially in the North American market where consumers, even at the higher income end of the market, are starting to curtail spending,” Neil Saunders, managing director at GlobalData, stated in an emailed assertion. “This has put pressure on Tapestry and Capri, both of which are now looking to international markets to bolster growth. There is more security in embarking on bold international plans as a larger entity.”

The deal additionally offers Tapestry extra cachet within the luxurious market, analysts stated.

“Tapestry has long-eyed becoming a bona fide ‘house of luxury’” just like Kering and LVMH in Europe, stated Craig Johnson, president of consultancy Customer Growth Partners. “But its current brands are near-luxe rather than true luxe. Capri gives Tapestry a toehold in the true luxe world, which even though Kors is by far Capri’s largest brand, over time Versace may well be the real ‘jewel in the crown.’”

In its most up-to-date quarter, Tapestry’s internet gross sales elevated 13 %. Capri’s income in its most up-to-date quarter fell 10.5 %.

Tapestry stated it will report its quarterly and full-year earnings on Aug. 17.