Michael Kors nearing deal to buy Versace for US$2B

27 September, 2018, 01:06 | Author: Darnell Patrick
  • Versace on verge of sale to Michael Kors

Handbag designer Michael Kors is reportedly closing in on a deal to buy iconic Italian fashion house Versace, as Wall Street Journal reports.

Blackstone Group LP owns 20 percent of Versace, which sells leopard-print sweatshirts for 2,100 euros ($2,470) and 995-euro tartan-covered sneakers.

The deal is expected to close in the fourth fiscal quarter, subject to regulatory approvals.

The deal would give Michael Kors the ability to "properly compete with Kering's power brand, Gucci", explained Allday, noting that the consolidation in the fashion creates risks of for smaller brands that stay independent "of being left behind" and unable "to afford the exposure" of a bigger company.

The reports of a sale come as Michael Kors has made it clear that it wants to transform itself into a house of luxury brands, starting a year ago with its acquisition of Jimmy Choo, made famous for its "Sex and the City" stilettos. And it comes as the Michael Kors business still hasn't been turned around, despite some progress made.

Versace, known for its bold and glamorous designs, is one of a clutch of family-owned Italian brands seen as attractive targets at a time when the luxury industry is benefiting from strong demand from China.

French fashion houses including Paris-based Kering PRTP.PA were among those holding talks with the Versace family, the sources said, but considered the price too expensive.


Neither Versace nor Kors responded to a request for comment.

Sources told the newspaper the official announcement from Milan would come Tuesday, when creative director Donatella Versace has scheduled a staff meeting, but that confirmation of the news could come within hours. The company had been working toward an initial public offering, though market conditions haven't allowed it to move ahead. The Versace family is reported to want to continue its involvement.

LVMH, PVH Corp. and Tapestry also looked at Versace in recent months, according to a report on Sunday by Women's Wear Daily.

As spotted by the Bloomberg reporter Kim Bhasin, Donatella Versace's Instagram has been bombarded with comments begging her to call off the deal.

Last year it returned to a net profit of just under 15 million euros compared with a net loss of 7.9 million euros the previous year.

Versace was founded by Gianni Versace in 1978.

Models present creations at the Versace show during Milan Fashion Week Spring 2019 in Milan, Italy, September 21, 2018.

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