Fashion company, Michael Kors buys Versace, the Italian luxury brand founded by Gianni Versace in 1978, for $2.12 billion. The two fashion houses made the announcement earlier Tuesday. This followed a day of speculation about the potential deal.
Donatella Versace, the artistic director of the Milan-based fashion house helped lead the company after her brother’s death in 1997. She stated that it was the perfect time for the company to join with Michael Kors.
“It has been more than 20 years since I took over the company along with my brother Santo and daughter Allegra. I am proud that Versace remains very strong in both fashion and modern culture.”
A lot of fans of Versace were unhappy with the deal. In addition to a mountain of cash, Versace and her brother and her daughter will receive 150 million euros (about $177 million) worth of shares in the newly united company. When the deal closes, Michael Kors Holdings Limited will change its name to Capri Holdings Limited.
“We are excited to have Versace as part of our family of luxury brands. There is a commitment to investing in its growth. With the full resources of our group, we believe that Versace will grow to over U.S. $2 billion in revenues.”
Outlining that plan, Kors said it wants to get Versace products in more stores — from around 200 now to a goal of 300. It would also put more emphasis on Versace’s creation of accessories and footwear — products that it said could bring in 60 percent of revenues, up from 35 percent currently.
The combined company is also projected to change the geographic footprint of Michael Kors Holdings. The fashion brand wants to reduce its reliance on business in the Americas and raise its exposure in Asia.