U.S. fashion brand Michael Kors is close to buying celebrated Italian design house Versace, according to several news sources, including Reuters, Bloomberg, and The Wall Street Journal.
UPDATE: On Tuesday, the company confirmed the $2.1 billion sale, which will involve Michael Kors changing its name to Capri Holdings Limited. As part of a new strategic plan, Capri hopes to increase Versace’s presence in the accessories space, and increase its global presence to 300 stores, from the 200 it has now.
The Versace family, which currently owns 80 percent of the company, will retain a stake in the brand and continue to play a role in its management. Donatella Versace currently serves as its creative director, while Santo Versace is its chairman. Their sibling Gianni Versace, who founded the company in 1978, was killed in 1997.
Under the deal, private equity firm Blackstone Group will sell its current 20 percent holding, which it acquired in 2014.
Blackstone has been urging a sale of the company for some time, according to reports. A story in Italian newspaper Corriere della Sera states that Tiffany & Co. looked into buying it. A Tiffany spokesperson did not return a request for comment at press time.
Luxury conglomerate Kering scouted out the brand, but decided it was overpriced, according to Reuters. LVMH also took a pass, according to WWD.
Kors, which made its name with affordable leather handbags, last year paid $1.35 billion for footwear company Jimmy Choo. Analysts have suggested that Michael Kors is aiming for a portfolio of high-end brands, similar to European holding companies like LVMH.
In an Aug. 8 conference call, Michael Kors CEO John D. Idol said the company was actively looking for other luxury acquisitions, according to a SeekingAlpha transcript. He noted that the company was planning to launch a new fine jewelry collection.
Investors appeared mixed on the linkup; Kors’ stock fell six percent following the stories reporting the deal.
Top: Versace Tribute Edition V-Circle watch, courtesy of Versace
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