Handbag maker Michael Kors has announced that it will buy Italian fashion house Versace for about two billion US dollars.
Versace which is one of the last independent fashion labels in the market is 80% owned by the Versace family. Since 2014, 20% of the company's shares have been owned by the US private equity group Blackstone. Michael Kors Holding will take over all shares with the amount of 2 billion dollars being 2.5 times the current sales of the brand.
With the acquisition of the fashion house, the name Michael Kors Holdings Limited will change to Capri Holdings Limited. The Versace family will continue to play a major role in the company. Donatella Versace, who is creative director of the fashion house, will continue her role. Kors' plan for the Italian fashion house involves expanding its global presence in the retail sector from 200 to 300 stores, accelerating the expansion of online commerce, and increasing the share of footwear and accessories for men and women from 35% to 60%.
'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,' Donatella Versace said in a statement.
'The acquisition of Versace is an important milestone for our group. With the full resources of our group, we believe that Versace will grow to over US$2.0 billion in revenues. 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, Chairman and Chief Executive Officer of Michael Kors Holdings Limited added.
Michael Kors has been on an aggressive acquisition path to cement its status as a conglomerate and rival of the major European luxury groups LVMH, Kering and Richemont. Last year it bought the British luxury shoe brand Jimmy Choo for 1.2 billion dollars.
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