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HomeFashion & AccessoriesIts official! Michael Kors acquires Versace for $2.12 billion

Its official! Michael Kors acquires Versace for $2.12 billion

It’s official now! In the race to build America’s first-ever luxury conglomerate, Michael Kors Holdings, now renamed Capri Holdings, has acquired the world-famous Italian fashion house Versace for a value of approximately USD 2.12 billion, including debt.

The primary cash deal — with only €150 million in stock is expected to close in the fourth quarter of 2019, reduce earnings in the first year, but contributing profits starting in year two.

“This is a very exciting moment for Versace. 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. Versace is not only synonymous with its iconic and unmistakable style, but with being inclusive and embracing of diversity, as well as empowering people to express themselves. Santo, Allegra and I recognize that this next step will allow Versace to reach its full potential,” Donatella Versace said in a statement.

The Italian designer added, “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. We believe that being part of this group is essential to Versace’s long-term success. My passion has never been stronger. This is the perfect time for our company, which puts creativity and innovation at the core of all of its actions, to grow.”

The Versace family will become shareholders of Capri Holdings Limited, with Donatella keeping her role as creative director of the fashion house. Capri Holdings, formerly Michael Kors Holdings, now has three major fashion houses under its portfolio: Michael Kors Collection, Jimmy Choo, and Versace.

“The acquisition of Versace is an important milestone for our group…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,” John D. Idol, CEO of Michael Kors Holdings Limited, said in a release.

In a presentation released to investors, Kors outlined its plans for Versace, including increasing its global retail footprint from 200 stores to 300, building out e-commerce and expanding men’s and women’s accessories and footwear. Currently, it makes up 35 percent of the business, the group would like to increase that to 60 percent respectively.

Under the new organization, John D Idol will remain chairman and chief executive of Capri Holdings and also chief executive of the Michael Kors brand. Versace chief executive Jonathan Akeroyd will continue on, as will creative director Donatella Versace.

The acquisition is the latest in a recent wave of industry alliance that has seen Ermenegildo Zegna purchase Thom Browne, and the Puig Group take a majority stake in Dries Van Noten.

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