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Billions takeover : Michael Kors buys Versace fashion house in Milan
The legendary Italian fashion house Versace is sold to Michael Kors. The US fashion group was paying around 1.8 billion euros, the company announced on Tuesday. Versace is one of the few luxury brands in Italy that was previously owned by the founding family. Head designer Donatella Versace will continue to play an important role. Like the eccentric fashion style, the 63-year-old's quite controversial appearance - her blonde hair, tight facial features and full lips - is closely linked to the brand.
The fashion house was founded in 1978 by Gianni Versace. His family ultimately still controlled 80 percent of the company: Sister Donatella accounted for 20 percent, brother Santo 30 percent, and Donatella's daughter Allegra the remaining 50 percent. "Donatella will continue to lead the company's creative vision," announced Michael Kors boss John D. Idol. The US group also announced that it would change its name to Capri Holdings as part of the takeover.
Although luxury designer fashion is enjoying great popularity driven by a boom in Asia, Versace has struggled in recent years. The drop in consumption triggered by the economic crisis had given the company a hard time. However, after global job cuts and cost-cutting measures, the situation has recently improved again. Last year the Milanese fashion house returned to the black and achieved a profit of 15 million euros on sales of 686 million euros.
Versace is fighting tough competition in the luxury segment, for example from rival Louis Vuitton, which belongs to the French industry giant LVMH, and other luxury brands such as Gucci and Prada. The market is booming, thanks in particular to strong demand from China. But expensive designer fashion is also very popular in Germany and the USA - for example in the rap scene that focuses on status symbols. With its shrill leopard patterns and Medusa head as a logo, Versace doesn’t meet everyone's taste by far, but fans can buy the pieces for thousands of dollars or euros. Versace wearers included Lady Gaga and Sting as well as Princess Diana.
Michael Kors, too, defines himself as a high-end supplier, but with his handbags and accessories he is in a significantly lower-priced league. The group was founded in 1981 by the US fashion designer Michael Kors of the same name and is listed on the New York Stock Exchange, but is now based in London. The company is expanding rapidly and only spent around $ 1.2 billion on luxury shoe brand Jimmy Choo in 2017. Michael Kors tries with acquisitions to compete with the big conglomerates like LVMH or the Gucci and Balenciaga mother Kering. According to the US media, they also had their eyes on Versace.
In the past fiscal year, Michael Kors reported sales of $ 4.7 billion. Although Versace is one of the most glamorous brands in the fashion world, the takeover was initially not at all well received by investors - after the first reports, the share plummeted sharply in US trading.
40 years ago Gianni Versace presented the first collection with his name and from then on mixed up the northern Italian fashion industry. The brand achieved its worldwide breakthrough in the 1980s and 1990s, becoming known for its opulence and bright colors. The designer was shot in front of his Florida villa more than 20 years ago. (dpa)
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