An iconic affordable luxury American brand buying a glitzy Italian fashion house? Why not?
According to reports, Michael Kors Holdings Ltd has agreed to take control of Gianni Versace SpA in a deal valued at $2 billion to $2.4 billion. Kors’ notions to expand its namesake brand have been evident. According to Bloomberg, Kors snapped up shoemaker Jimmy Choo Plc last year for about $1.2 billion. Kors has also been vying with Coach owner Tapestry Inc. to build a U.S.-based multibrand fashion empire (think Paris-based conglomerates LVMH and Kering SA).
If the deal went through, Kors would take over private investor Blackstone’s share and preserve the Versace family’s involvement.
Aesthetically, the companies couldn’t be more different. Versace, helmed by Donatella Versace ever since her brother’s untimely murder in the late 1990s, can only be defined as flamboyant Italian Baroque, with lots of black leather, color, gold chain and a heavy dose of sexiness. Michael Kors goes for more of an Americana vibe, filling his Fall 2018 show with argyle, plaid and pretty florals.
Owning Versace would be a “crown jewel” for Kors, especially with its heavy penetration in the Asian market. Versace does more than half of its sales in Asia, according to Fortune.
Speculation continues on other potential buyers, however, until a deal is done. According to Fortune, other potential buyer whose name was floating around Milan Fashion Week was Tiffany & Co. The jeweler is headed up by an Italian CEO who has been trying to shake things up.
An announcement is expected to be formally made on Tuesday.