Michael Kors nears US$2 billion deal to buy Versace

Michael Kors nears US$2 billion deal to buy Versace

According to a Bloomberg report, Michael Kors Holding Ltd.is nearing an agreement to buy the Italian fashion house, out-maneuvering several other interested parties.

Donatella Versace, the brand's vice-president and artistic director, has called an all-staff meeting for Tuesday to announce the deal, according to the Italian newspaper Corriere della Sera. Kors has been expanding into high-end brands, buying the luxury shoemaker Jimmy Choo for nearly $1.4 billion previous year.

The move is in line with the US brand's ambition to aggregate various luxury brands - including fashion, shoes and accessories - under one larger group. Private-equity giant Blackstone Group, which owns 20% of Versace, is selling its stake in the business as part of the deal, one person said.

Donatella Versace has run the label since her brother was murdered.

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Blackstone, whose stake acquisition valued Versace at US$1.4 billion in 2014, declined to comment.

"The news of Versace's acquisition by Michael Kors Holdings will come as quite a shock to followers, admirers and customers of the iconic Italian brand, which has always been characterised by its fierce narrative and aesthetic as well as its strong family values and independence", said a note from Euromonitor International analyst Florence Allday. The shares have recovered since then, trading 15 percent higher for the year, with Choo boosting the latest quarterly results.

Again, Michael Kors is aiming to bolster its roster of luxury brands including those in the fashion, footwear, and accessories categories.

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. The company had been working toward an initial public offering, though market conditions haven't allowed it to move ahead.

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

Italian Fashion House Versace opens the Haute Couture Fashion Week.

The company posted revenue of 686 million euros in 2016 and returned to profitability in 2017.

Versace was founded by Gianni Versace in 1978.

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