Michael Kors Holding Ltd. is reportedly buying Gianni Versace SpA as soon as this week, according to Business of Fashion. The potential deal puts the value of the Italian house at $2 billion, and if a final agreement is reached, the Versace family will still hold a role within the company.
After Versace debuted its Spring 2019 collection on Friday, rumors swirled of its alleged acquisition toward the end of Milan Fashion Week on Sunday, says WWD. Suitors for the deal include all of the well-known conglomerates: LVMH Moët Hennessy Louis Vuitton, Kering, PVH Corp., Tapestry Inc., as well as Michael Kors Holding Ltd., which bought Jimmy Choo for $1.2 billion last year. During that time, CEO John D. Idol told the trade publication, "We are creating a global luxury fashion group. Our focus is on international fashion luxury that are industry leaders."
The timing makes sense for Idol to have his eyes on Versace next, as the luxury label's presence across the fashion space, pop culture and the mainstream zeitgeist continues to grow, from television and music to celebrity dressing and a memorable Spring 2018 supermodel-studded runway and archive-heavy collection, which has taken over magazine covers and ignited vintage Versace sales.
However, another piece to this acquisition puzzle is Blackstone, which has owned 20 percent of Versace since 2014. Over the years, the Italian house has seen major growth in retail and focused its efforts on (and investments in) store openings, refurbishments to existing stores and e-commerce. There's no word yet on whether or not the private equity firm will continue to hold its stake in Versace if an acquisition were to finally take place.
A representative for Versace has declined to comment and we also reached out to representatives from Michael Kors. We will update this post as we learn more.
UPDATE, Tuesday, Sept. 25, 2018, 7:55 a.m.: On Tuesday, Michael Kors Holding Ltd. has confirmed the full acquisition of Gianni Versace SpA for a total value of $2.12 billion.
"We are excited to have Versace as part of our family of luxury brands, and we are committed to investing in its growth," said CEO John D. Idol in an official statement. "With the full resources of our group, we believe that Versace will grow to over $2 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."
According to Idol, Donatella Versace (who, along with her brother Santo and daughter Allegra, took over her family business more than two decades ago) will continue to lead the Italian house's creative vision. Versace CEO Jonathan Akeroyd will still hold his two-year-plus role alongside Donatella and their design and managements teams.
"Santo, Allegra and I recognize that this next step will allow Versace to reach its full potential," said Donatella in an official statement. "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."
Following in the footsteps of Coach Inc.'s switch to be called Tapestry Inc., the global luxury fashion group has also been renamed to Capri Holdings Ltd., in which Donatella, Santa and Allegra will become shareholders.
In addition to Capri Holdings Ltd.'s plans to increase Versace's global revenue to $2 billion, the conglomerate also aims to increase its retail presence around the world, enhance its marketing, accelerate its e-commerce and omni-channel development, expand the revenues of accessories and footwear, as well as maintain the high anticipation that comes with Versace's runway shows.