‘Wow!’ did you say? You can say that again! Surprising news to hear but this is a brand that bought Jimmy Choo for $1.2 bn-
“We believe that the strength of the Michael Kors and Jimmy Choo brands, and the acquisition of Versace, position us to deliver multiple years of revenue and earnings growth,” said John Idol, chairman and CEO of Michael Kors.
The sale will definitely take away independence from the stand- alone Versace brand which has been controlled by Gianni Versace’s sister, Donatella for years.
The Versace family, which now owns 80 percent of the fashion house via a holding company called Givi, will receive 150 million euros of the purchase price in Capri shares. After the deal, Versace CEO Jonathan Akeroyd will stay at the helm of the company, while Donatella Versace will “continue to lead the company’s creative vision,” Idol added.
Kors said, the company will change its name to Capri Holdings Limited once the deal is completed.
“We believe that being part of this group is essential to Versace’s long-term success. My passion has never been stronger,” said Donatella Versace. Versace is known for its bold and glamorous designs and its Medusa head logo,
Kors described the purchase as a milestone in its expansion plans. The Michael Kors brand has had its roots in the “middle market” of the luxury sector and relied on outlets and department stores, where deep discounting is common. But mall traffic has declined in North America — Kors’s biggest market — and shoppers were changing, too, increasingly seeking brands at the extreme of the style and price spectrum.
Acquiring Versace, led by the artistic director Donatella Versace, whose flamboyant gowns can sell for thousands of dollars, is part of the company’s strategy to woo more big spenders — and find more loyal customers in Europe and Asia.
Michael Kors, whose namesake label is best known for its leather handbags, has made no secret of its ambition to grow its portfolio of high-end brands after buying British stiletto-heel maker Jimmy Choo last year.
As part of the deal, Michael Kors agreed to buy all of Versace’s outstanding shares for a total enterprise value of 1.83 billion euros ($2.2 billion), to be funded in cash, debt and shares in Michael Kors Holding Ltd., to be renamed Capri Holdings Ltd.US private equity firm Blackstone, which bought 20 percent of Versace back in 2014, will fully exit its investment.
The deal is the latest consolidation in the fashion industry, as traditional players have scooped up smaller brands. This year alone Ermenegildo Zegna bought control of Thom Browne, while Puig acquired majority control of Dries Van Noten.
Source: nypost.com. nytimes.com
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