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Italian Luxury Brand Versace To Be Bought By US Label Michael Kors: Reports


09/25/2018


Italian Luxury Brand Versace To Be Bought By US Label Michael Kors: Reports
The US handbag and clothing brand Michael Kors is reportedly set to buy the Italian fashion house Versace which was founded by Gianni Versace 40 years ago. The deal has been reported to be worth $2bn.
 
The late Gianni Versace’s niece, Allegra Versace Beck, would almost be turned into a billionaire because of the deal as she had inherited 50 per cent of the Italian company following the murder of the designer – entrepreneur in 1997.
 
About 8u0 per cent of Versace is owned by the Versace family still after they sold out 20 per cent of the company to the US private equity group Blackstone for €210m in 2014. 50 per cent of the current stake owned by the Versace family lies with Allegra while Gianni’s older brother, Santo, owns 30 per cent and the rest 20 per cent is owned by Allegra’s mother and Gianni’s sister, Donatella Versace.
 
According to a report published by news agency Reuters, creative control in the company any and a minority stake would be owned by the family. Reports also suggested that their entire share in the company could be sold by Blackstone.
 
There were comments made on the reports by Versace, Michael Kors and Blackstone. The first report on this issue was published in the Italian newspaper Corriere della Sera. An all-staff meeting to announce the deal has been called on Tuesday by 63-year-old Donatella, who is the brand’s vice-president and artistic director, according to the news report.
 
There were plans made by Versace of going public and getting itself listed on a stock exchange but had to quit the idea because the market conditions were not favourable. According to a statement by the chief executive of the company, Jonathan Akeroyd, published earlier this year, the company is expecting to generate revenues of more than €1bn (£895m) for the current year which would be a significant increase from the €686m that the company had generated in 2016, when the last figures were made available by it for the public.
 
In recent times, a number of fashion houses have been bought by Michael Kors which included the London shoemaker Jimmy Choo in a deal worth almost £900m.
 
 “It is interesting to witness the marriage of such distinct brands in order to create another multinational luxury goods conglomerate. Although Michael Kors already owns Jimmy Choo, the addition of Versace is a major expansion for the group. They are not yet on the scale of LVMH or Kering but clearly have ambitions to expand their reach in the luxury goods sector”, said Kate Swaine, a partner at the law firm Gowling WLG.
 
 “That Michael Kors should court Versace is no great surprise. The American company has long desired to transform itself into a house of luxury brands; a process it started with last year’s acquisition of Jimmy Choo. Versace comes with a much bigger price tag – almost double the $1.2bn price that Michael Kors paid for Jimmy Choo. However, it would also put a big-hitting brand with true global status into Michael Kors’ stable”, said Neil Saunders, the managing director of the analysis firm GlobalData Retail.
 
(Source:www.theguardian.com)


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