Michael Kors nearing deal to buy Versace for US$2B

Jermaine Castillo
September 27, 2018

Versace is reportedly set to be snapped up by United States fashion group Michael Kors in a $2bn (£1.5bn) deal.

Donatella Versace and her brother Santo Versace have helped run the company since their brother Gianni's murder in 1997. Just a year ago the handbag designer purchased British shoe label Jimmy Choo for $1.7 billion AUD.

Last year, the American group bought Jimmy Choo - whose stilettos were made famous by TV series Sex and the City - for $1.35bn. The other 20% is owned by the private-equity firm Blackstone Group, which acquired the stake in 2014.

The family will reportedly retain a role after the takeover.

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USA fashion brand Michael Kors is close to buying celebrated Italian design house Versace, according to several news sources, including Reuters, Bloomberg, and The Wall Street Journal.

Versace is one of a clutch of family-owned, independent Italian brands that have regularly been cited as attractive targets at a time when the luxury industry is riding high on strong demand from Chinese consumers.

"Why just WHY would you sell Versace to a brand like MICHAEL KORS", says another.

Shares of Kors fell 7.4 per cent to US$67.32 in mid-morning trading in NY.

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The stark difference between Michael Kors and Versace has some fans revolting against the rumoured deal on social media. Versace has been pushing for an initial public offering, or IPO, but they failed to reach the goal due to a fluctuating market.

Since Akeroyd's appointment in 2016, Versace has been working on streamlining its management structure, cutting costs and pushing to increase sales online.

LVMH, PVH Corp. and Tapestry also looked at Versace in recent months, according to a report on Sunday by Women's Wear Daily. The 40-year-old fashion house returned to profit in 2017 and reported revenue of almost $800 million. She is artistic director of the fashion house.

Models present creations at the Versace show during Milan Fashion Week Spring 2019 in Milan on Friday.

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Versace was founded by Gianni Versace in 1978.

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