Versace set for takeover in $2bn deal

Gladys Abbott
September 24, 2018

Milanese fashion house Versace is close to being bought out by USA luxury fashion firm Michael Kors in a deal worth around $2billion (£1.53billion), according to reports in the Italian press.

The sale of Italian fashion house Versace could be announced "within hours", daily newspaper Corriere della Sera has said, citing unnamed sources.

London-based Kors past year snapped up shoemaker Jimmy Choo Plc for about 896 million pounds ($1.2 billion), expanding beyond its namesake brand.

Michael Kors, best-known for its leather handbags, has made clear its ambition to grow its stable of high-end fashion brands in an industry still dominated by European players such as Louis Vuitton owner LVMH.

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Gianni Versace's fashion empire will fall into American hands 21 years after the Italian designer was murdered outside his mansion in Miami. The private equity firm plans to sell its stake in the deal, according to a person familiar with the situation. The strategy follows moves by other fashion companies. Michael Kors and private equity firm Blackstone, which owns 20% of Versace, did not immediately respond to a request for comment. Kors is also trying to purchase Coach owner Tapestry Inc.

"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. "Would Michael Kors have what it takes to succeed in this?" Donatella serves as creative director, while Santo is chairman.

Versace was founded by Gianni Versace in 1978.

Versace does not disclose its financial details, but documents deposited with the Italian chamber of commerce show the Milan-based group previous year posted sales of €668 million ($1 billion Cdn) and earnings before interest, tax, depreciation and appreciation (EBITDA) of €44.6 million ($67.7 million Cdn).

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