Published: Tue, September 25, 2018
Finance | By Cynthia Curry

Michael Kors is close to buying Versace for $2 billion

Michael Kors is close to buying Versace for $2 billion

USA fashion group Michael Kors Holdings Ltd. has agreed to take control of Italy's Versace in a deal that could value the company at $2 billion United States, sources familiar with the matter said on Monday.

Donatella Versace, Gianni's sister and the company's artistic director, has reportedly called a staff meeting on Tuesday.

Last year, Michael Kors bought Jimmy Choo, the luxury shoemaker founded in London, for nearly £900m.

Michael Kors has been looking to bolster its group of luxury retailers against rivals such as Louis Vuitton owner LVMH (LVMHF) and Tapestry, the parent of Coach and Kate Spade.

"We believe that some of the work required on Versace, which includes toning down some of the brasher elements of the brand which are now out of step with the more subtle tone preferred by modern consumers, are precisely the issues with which Michael Kors has struggled and is yet to satisfactorily resolve", wrote Saunders in a report. The Versace family will continue to have a role in the company under any agreement, they said.

Injuries, suspensions and line-up vs West Ham
Now it is very hard because in the first part of the season it is very important to play with a very solid team. Chelsea's attack, though, is of similarly great concern to West Ham.

A representative for Versace declined to comment on the potential transaction. Neither Versace, Michael Kors, or Blackstone had an immediate comment on the ongoing negotiations. The shares have recovered since then, trading 15 percent higher for the year, with Choo boosting the latest quarterly results.

The sale of Versace, which is known for its Medusa head logo, was sealed on Monday, three sources familiar with the talks confirmed to Reuters.

Versace had planned to float the company on the stock market but put the plans on hold owing to unfavourable conditions. Donatella Versace holds 20 percent, her brother Santo 30 percent and Donatella's daughter Allegra 50 percent.

LVMH, PVH Corp. and Tapestry also looked at Versace in recent months, according to a report on Sunday by Women's Wear Daily.

Versace had revenue of 686 million euros and returned to profit in 2017, according to figures provided by the company. In a tribute to Gianni, Donatella Versace brought back the most iconic looks from his collections spanning the 1990s, including silk blouses mixing leopard prints with images of baroque architecture.

Like this: