Versace rumoured to be Going on Sale soon

Alicia Cross
September 27, 2018

As part of the deal, Michael Kors agreed to buy all of Versace's outstanding shares for a total enterprise value of 1.83 billion euros, to be funded in cash, debt and shares in Michael Kors Holding Ltd, which will be renamed Capri Holdings Ltd.

Their sibling Gianni Versace, who founded the company in 1978, was killed in 1997.

French fashion houses including Paris-based Kering PRTP.PA were among those holding talks with the Versace family, the sources said, but considered the price too expensive.

Kors, which made its name with affordable leather handbags, previous year paid $1.35 billion for footwear company Jimmy Choo. Past year the American company acquired Jimmy Choo for $1.2bn. The private equity firm plans to sell its stake in the deal, according to a person familiar with the situation. Michael Kors already owns Jimmy Choo, is reportedly signing a deal to buy Gianni Versace SpA.

The deal - which is expected to be announced imminently - will give Michael Kors a mega-brand and red carpet favorite that is among the most recognizable and followed fashion labels in the world.

The reports of a sale come as Michael Kors has made it clear that it wants to transform itself into a house of luxury brands, starting past year with its acquisition of Jimmy Choo, made famous for its "Sex and the City" stilettos.

Shares in Michael Kors fell in early USA trade and were down 8.7 percent by 1526 GMT.

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Blackstone, whose stake acquisition valued Versace at $1.4 billion in 2014, declined to comment. The company had been working toward an initial public offering, though market conditions haven't allowed it to move ahead.

In 2016, Versace poached Alexander McQueen's boss Jonathan Akeroyd to help it smarten up for a stock market listing, although that never materialised.

The Versace family still owns 80% of the company.

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

Donatella Versace is the brand's creative driver. The 40-year-old fashion house returned to profit in 2017 and reported revenue of almost $800 million.

"A continued prominent role for Donatella Versace will be vital in short-term, until a suitably high-profile or high potential candidate can be found to take the fashion house forward, in a similar way to how Christopher Bailey steered Burberry and Alessandro Michele has reinvigorated Gucci", he added. 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.

Other reports by Free-Prsite

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