Michael Kors to buy Versace; change name
Michaels Kors Holdings Limited is buying an Italian fashion-forward brand long associated with celebrities and the red carpet. The U.S. apparel and accessories company is also changing its name.
Michael Kors continues to transform itself into a luxury powerhouse with an agreement to buy one of the world’s most well-known and glamorous luxury fashion houses, Gianni Versace S.p.A., in a deal valued at approximately $2.12 billion. It is one of the first times a U.S. company has acquired an extremely high-end, high-profile European fashion brand. The deal follows Michael Kors’ acquisition of upscale European footwear company Jimmy Choo last year.
Once the acquisition closes, Michael Kors will change its name to Capri Holdings Ltd., with the new moniker inspired by the famous island. Analyst Neil Saunders, managing director of GlobalData Retail, said the name change makes sense, as it reflects the expanded interests of the group.
“This follows the example of Coach which changed its corporate name to Tapestry following the acquisition of Kate Spade,” he said. It is a subtle change, and one many consumers may not notice, but in our mind, it underlines the intention of the group to become a luxury powerhouse.”
Michael Kors said it expects the acquisition will help grow its revenues to $8.0 billion in the long-term. It plans to increase Versace’s sales to $2 billion annually, more than double the current level, and expand its global footprint from approximately 200 stores to 300 locations. It also plans to accelerate Versace’s e-commerce development.
“We are excited to have Versace as part of our family of luxury brands, and we are committed to investing in its growth,” said John D. Idol, chairman and CEO, Michael Kors. "With the full resources of our group, we believe that Versace will grow to over $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.”
Donatella Versace, who took over the company along with her brother Santo Versace following the murder of their sibling Gianni Versace in 1997, will continue to lead the company’s creative vision. She and her brother, along with her daughter Allegra, will become shareholders in Capri Holdings. Versace’s management team will continue to be led by CEO Jonathan Akeroyd.
“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,” said Donatella Versace. “Santo, Allegra and I recognize that this next step will allow Versace to reach its full potential. 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.”
Michael Kors continues to transform itself into a luxury powerhouse with an agreement to buy one of the world’s most well-known and glamorous luxury fashion houses, Gianni Versace S.p.A., in a deal valued at approximately $2.12 billion. It is one of the first times a U.S. company has acquired an extremely high-end, high-profile European fashion brand. The deal follows Michael Kors’ acquisition of upscale European footwear company Jimmy Choo last year.
Once the acquisition closes, Michael Kors will change its name to Capri Holdings Ltd., with the new moniker inspired by the famous island. Analyst Neil Saunders, managing director of GlobalData Retail, said the name change makes sense, as it reflects the expanded interests of the group.
“This follows the example of Coach which changed its corporate name to Tapestry following the acquisition of Kate Spade,” he said. It is a subtle change, and one many consumers may not notice, but in our mind, it underlines the intention of the group to become a luxury powerhouse.”
Michael Kors said it expects the acquisition will help grow its revenues to $8.0 billion in the long-term. It plans to increase Versace’s sales to $2 billion annually, more than double the current level, and expand its global footprint from approximately 200 stores to 300 locations. It also plans to accelerate Versace’s e-commerce development.
“We are excited to have Versace as part of our family of luxury brands, and we are committed to investing in its growth,” said John D. Idol, chairman and CEO, Michael Kors. "With the full resources of our group, we believe that Versace will grow to over $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.”
Donatella Versace, who took over the company along with her brother Santo Versace following the murder of their sibling Gianni Versace in 1997, will continue to lead the company’s creative vision. She and her brother, along with her daughter Allegra, will become shareholders in Capri Holdings. Versace’s management team will continue to be led by CEO Jonathan Akeroyd.
“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,” said Donatella Versace. “Santo, Allegra and I recognize that this next step will allow Versace to reach its full potential. 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.”