Yesterday, the rumour mill began to lift its creaky sails with whispers that Michael Kors was set to purchase Versace. Now, it’s official. Michael Kors Holdings Limited has confirmed this morning they acquired the Versace brand in a deal worth $2.1 billion dollars.
If you’re wondering where this leaves Donatella, the quintessential Italian goddess of glamour will remain on as creative director of the brand her brother Gianni founded in 1978.
“This is a very exciting moment for Versace,” Donatella said in a press release. “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….We believe that being part of this group is essential to Versace’s long-term success…This is the perfect time for our company, which puts creativity and innovation at the core of all of its actions, to grow.”
“With the full resources of our group, we believe that Versace will grow to over US$2.0 billion in revenues,” said John D. Idol, Chairman and Chief Executive Officer of Michael Kors Holdings Limited. “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.”
Kors acquired Jimmy Choo for $1.2 billion earlier this year and the sale has already had a positive effect on revenues.
The name of the holdings company, Michael Kors Holdings Limited, will change to Capri Holdings Limited once the sale is finalized. Named after the idyllic island off the coast of Italy, it’s a symbolic choice: Capri is a three rock formation, which hints at the conglomerate formed by Michael Kors, Versace, and Jimmy Choo.
Kors plans to increase the number of Versace stores worldwide from 200 to 300, as well as increase accessories revenues from 35% to 60%. Which means we can expect to see a lot of influencers carrying Versace handbags in the very near future.
Versace has always considered a family company since its inception; Donatella took control of the brand after the death of her brother, Gianni, 20 years ago. “Santo, Allegra and I will become shareholders in Capri Holdings Limited. This demonstrates our belief in the long-term success of Versace and commitment to this new global fashion luxury group,” she says.
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