The Italian fashion house Versace will fall into the hands of America. It will be gobbled up by competitor Michael Kors.
Milan – The American company Michael Kors will take over the Italian fashion house Versace for 1.83 billion euros (46.8 billion Czech crowns). The companies announced it in a joint statement, confirming press speculation. The well-known company and one of the few remaining independent fashion brands will be the last Italian company to fall into foreign hands.
New York Fashion Designer Council – Blake Lively and Stylist Michael Kors | Photo: Reuters
Michael Kors will buy out all of Versace’s shares and pay with a combination of cash, debt and treasury stock. At the same time, Michal Kors Holdings changed its name to Capri Holdings.
Americans plan to increase the number of stores to 300 from the current 200. They also want to double the turnover to two billion dollars, which they aim to achieve, among other things, by increasing the share of shoes and accessories. From the current 35 percent, this category of goods should now account for 60 percent of turnover.
- The Italian fashion company Versace was founded in 1978 in Milan by fashion designer Gianni Versace. The main shareholder of the company is Allegra Versace with a 50% stake, inherited from her uncle Gianni. Gianni’s younger sister Donatello owns 20 percent of the shares. The remaining shares are held by Santo Versace, brother of Donatella and Gianni.
- The company with the medusa head in the logo has grown into a luxury fashion empire that has started dressing music stars like Elton John, Michael Jackson, Bruce Springsteen or Madonna and other celebrities. After the assassination of its founder in Miami in July 1997, the fashion company faced years of hardship.
- In 2014, American investment firm Blackstone bought a 20% stake in Versace, and the Milan-based company was considering going public at the time. The financial injection of 150 million euros (CZK 3.8 billion) should not only pay for overseas expansion, but also help with the public offering of shares. Versace boss Jonathan Akeroyd told Reuters earlier this year that he was in no hurry.
- In 2017, the company, which currently has around 1,500 employees, reported a profit again, this time of 15 million euros (384 million CZK), thanks to cost reductions and billing changes. Turnover rises to 686 million euros. Akeroyd’s boss said in June that the concern aims to generate a turnover of one billion euros in the short term.
The legendary Italian fashion brand was founded in 1978 by Gianni Versace, who was assassinated 21 years ago. Since then the family business has been led by his sister and muse Donatella, who has held the dual role of chief designer and co-head of the company. Both he and his brother Santo and daughter Allegra are expected to remain active in the company even after the sale.
After Gianni’s death, the company awaits hard times, problems caused by the drop in demand during the economic crisis. Versace has implemented austerity measures and layoffs around the world. Now, like other luxury fashion brands, they are experiencing an Asian boom, with particularly strong demand in China. Last year, the company managed to make a profit of 15 million euros (384 million CZK), the turnover rose to 686 million euros. Versace faces competition from rival Louis Vuitton, owned by French luxury company LVMH, and other luxury fashion brands such as Gucci or Prada.
Versace for HM – Aňa Geislerová | Photo: Jiří Herman/www.hermina.cz
Michael Kors is also known as a desirable brand, although it is less exclusive and less expensive, so it is widely available. This company, famous for its leather bags, does not hide its ambition to enter the most luxurious segment. Last year, it bought British luxury shoe maker Jimmy Choo for $1.2 billion.
Big fans of the Italian company, famous for its Medusa head logo and striking leopard print, disagree with Versace selling to America. As speculation mounted on Monday that Michael Kors would become the new owner, Donatella’s social media accounts were inundated with requests not to sell the business.
- American fashion accessories and clothing manufacturer Michael Kors Holdings is considered a manufacturer of affordable luxury goods. The company, which became famous for its designer bags, shoes and accessories, was founded in 1981 in New York by the American designer Michael David Kors.
- Showbiz stars Jennifer Lopez and Catherine Zeta-Jones, as well as former US first lady Michelle Obama, love the brand.
- In December 2011, the company went public, four years later it has more than 550 stores worldwide, and as of April 2016, it has approximately 12,700 employees.
- The company has decided to expand into apparel and menswear and is investing in online sales, as well as looking to expand its portfolio with other luxury brands. Last year, Michael Kors bought British shoe maker Jimmy Choo for $1.2 billion.
- The company’s revenue increased five percent to $4.7 billion in the 2017/2018 financial year.
- Michael Kors will buy out all of Versace’s shares and pay with a combination of cash, debt and treasury stock. At the same time, Michal Kors Holdings changed its name to Capri Holdings.