Published: Tue, September 25, 2018
Business | By Tara Barton

Michael Kors takes over luxury fashion icon Versace in $2-billion deal

Michael Kors takes over luxury fashion icon Versace in $2-billion deal

John Idol, chairman and chief executive officer of Kors said: "The acquisition of Versace is an important milestone for our group".

Michael Kors, with roots in the United States but headquartered in London, has struck a deal to buy Versace for 1.83 billion euros ($2.1 billion), a statement said.

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The US company said that Donatella Versace, sister of the fashion house's late founder Gianni Versace, would "continue to lead the company's creative vision".

"We believe that being part of this group is essential to Versace's long-term success".

Shares in New York-listed Michael Kors, which past year acquired show brand Jimmy Choo for £896million, fell by more than 8 per cent on the rumours yesterday.

Akeryod said in a statement, "Since I joined Versace over two years ago, our focus has been on leveraging the company's heritage and strong brand recognition worldwide, which has allowed us to experience significant growth in all regions".

Michael Kors said it plans to grow Versace's global sales to $2 billion globally, boost its retail footprint to 300 stores from around 200 at present and accelerate its e-commerce strategy.

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The deal with Michael Kors comes after the rumoured retreat of Kering, the French fashion giant which owns luxury brands like Gucci, Yves Saint Laurent and Alexander McQueen.

Shares in Michael Kors were down 0.4 percent at $66.43 in early trading in NY on Tuesday. The luxury fashion group says the deal will help it diversify its geographic portfolio from 66% Americas to 57% Americas; from 23% Europe to 24% Europe; and from 11% Asia to 19% Asia.

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 global jet-set.

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.

The bet on Versace comes as the US group looks to refresh the more downmarket image of the Michael Kors brand and recover some of its pricing power.

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

That a brand like Versace, with a DNA so entrenched in the exclusive and luxurious Italian aesthetic, has aligned itself with Michael Kors, a label known for its accessibility, has surprised many who were expecting it to announce an imminent IPO.

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