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. "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."
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".
She added in the statement: "We are all very excited to join a group led by John Idol, whom I have always admired as a visionary as well as a strong and passionate leader." 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.
Shares in Michael Kors were down 0.4 percent at $66.43 in early trading in New York on Tuesday. Michael Kors said the acquisition of Versace was expected to help grow its group's revenues to $8.0 billion 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.
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