Michael Kors Is Close to Buying Versace for $2 Billion

The legendary fashion house of Versace is about to be sold to a US company for $2 billion, according to Italy's biggest newspaper, Corierra della Sera.

USA fashion group Michael Kors Holdings Ltd. has agreed to take control of Italy's Versace in a deal that could value the company at $2 billion United States, sources familiar with the matter said on Monday. Michael Kors and private equity firm Blackstone, which owns 20% of Versace, did not immediately respond to a request for comment.

Budding luxury conglomerates, including Michael Kors' U.S. rival Tapestry TPR.N , owner of Coach and Kate Spade, are trying to make in-roads into an industry still dominated by European players such as Louis Vuitton owner LVMH LVMH.PA .

"[Blackstone] gradually persuaded the family to look into a possible sale and introduced them to a series of buyers, including Michael Kors", the source said.

This outfit looks a little flashy for Michael Kors.

Italian newspaper Corriere della Sera reported earlier that Versace could be sold this week for about US$2b, with several groups interested including Kors and Tiffany & Co.


The group, founded by designer Gianni Versace in 1978, boasted sales of 686 million euros (S$1.1 billion) in 2016 and turnover is expected to exceed one billion euros in the "short term", CEO Jonathan Akeroyd said in June.

Michael Kors may be about to rack up a serious bill at Versace.

Blackstone, whose stake acquisition valued Versace at $1.4 billion in 2014, declined to comment.

Also weight in on the conversation is Pascal Martin, partner, OC&C Strategy Consultants, who said Versace's new owner is betting on all the obvious levers - open more stores, grow e-commerce, increase the accessory business - to accelerate growth. Previous year the American company acquired Jimmy Choo for $1.2bn. The company had been working toward an initial public offering, though market conditions haven't allowed it to move ahead. Donatella Versace is now the chief designer of Versace Group, and sister of its founder.

Versace had revenue of €686m euros and returned to profit in 2017, according to figures provided by the company. She is artistic director of the fashion house. She closed the collection by walking the runway herself, arm-in-arm with 1990s models including Carla Bruni and Cindy Crawford.


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