Michael Kors buys Versace for $2.1bn

LONDON: Fashion house Michael Kors announced Tuesday it had agreed to buy Italian luxury giant Versace, signalling an intention to move deeper into the international big league after snapping up shoemaker to the stars Jimmy Choo last year.

Michael Kors, an iconic label rooted in American and New York fashion but headquartered in London, will pay 1.83 billion euros ($2.1 billion) for Versace, a statement said.

“We are excited to have Versace as part of our family of luxury brands, and we are committed to investing in its growth,” said Michael Kors chief executive John Idol.

“With the full resources of our group, we believe that Versace will grow to over $2.0 billion in revenues,” he added.

Idol said that Donatella Versace, artistic director and vice president of the Italian group, would stay on to lead the label’s creative vision, saying her “iconic style” was “at the heart of the design aesthetic of Versace”.

Donatella said the takeover was “essential to Versace’s long-term success”.

Michael Kors, best known for its bags, watches, and perfume, said it planned to grow the number of Versace stores worldwide by 50 percent to 300, and expand accessories and footwear from 35 to 60 percent of revenues.

The deal is the latest push by Michael Kors into high-end luxury after it bought British shoemaker Jimmy Choo in 2017 for $1.4 billion. It is seen also as positioning Michael Kors more fully as a competitor to Paris-based LVMH and Kering and the Swiss company Richemont among global heavyweights in luxury across various product lines, analysts said.

Michael Kors said the acquisition of Versace was expected to help grow its group’s revenues in the long-term, and diversify its geographic portfolio, pushing further into Asian markets.

Capri Holdings Limited is the new name to be adopted by Michael Kors Holdings Limited upon the closing of the acquisition, inspired by the Italian island in the Bay of Naples that has long attracted the international jet-set.

Versace was the brainchild of Gianni Versace, who was born in Calabria to a dressmaker mother and presented his first signature collection in 1978, with his brother Santo taking care of the label’s business arm. The designer, whose bold designs were embraced by Madonna and other mega-celebrities, was assassinated in 1997 by luxury-obsessed male prostitute Andrew Cunanan in Miami.

Twenty percent of Versace, known for its Medusa head logo, was bought by US private equity group Blackstone in 2014, and the family owns the rest.

Versace chief executive Jonathan Akeroyd, who is also staying on, said Tuesday that since joining the company two years ago, “focus has been on leveraging the company’s heritage and strong brand recognition worldwide”, in turn helping “to experience significant growth in all regions”.

Launched in 1981, Michael Kors is named after its US founder, the New York designer with an avid celebrity following who has dressed the likes of Melania Trump and Michelle Obama.

The 59-year-old Long Island-born self-made tycoon is still a creative director and the company has been through highs and lows, forced to file for bankruptcy protection in 1993, but able to restructure with an initial investment by LVMH before going back on the New York Stock Exchange in 2011.