Michael Kors Holdings is adding Versace to its stable of brands and renaming itself Capri Holdings to better reflect its growing empire.
The 1.83 billion euro deal was hotly anticipated and adds the Italian brand’s maximalist sensibility to its portfolio, which includes Michael Kors as well as Jimmy Choo, which was acquired for $1.2 billion last year.
John Idol, chairman and chief executive officer of Kors, said: “The acquisition of Versace is an important milestone for our group. Versace was founded in 1978. For over 40 years, Versace has represented the epitome of Italian fashion luxury, a testament to the brand’s timeless heritage. … With the full resources of our group, we believe that Versace will grow to over $2.0 billion in revenues. We believe that the strength of the Michael Kors and Jimmy Choo brands, and the acquisition of Versace, position us to deliver multiple years of revenue and earnings growth.”
Idol said he would be working with Donatella Versace on the next chapter of the brand’s growth.
“It has been more than 20 years since I took over the company along with my brother Santo and daughter Allegra,” she said. “I am proud that Versace remains very strong in both fashion and modern culture. Versace is not only synonymous with its iconic and unmistakable style, but with being inclusive and embracing of diversity, as well as empowering people to express themselves. Santo, Allegra and I recognize that this next step will allow Versace to reach its full potential.”
The deal, which Kors is funding with cash on hand and its credit facility, includes 150 million euros worth of stock in the new Capri Holdings.
Versace will continue to be led by Chief Executive Jonathan Akeroyd.
Kors has big hopes for the brand. Its plans include:
- Growing the business to $2 billion in revenues
- Building on its runway momentumAdding 100 stores for a total of roughly 300
- Ramping up e-commerce development
- Expanding accessories and footwear to 60% of sales, up from roughly 35% now
The transaction, which is expected to be closed in the fourth quarter, singles big changes for what is now Capri.
“Our name is inspired by the fabled island which has long been recognized as an iconic, glamorous and luxury destination,” the company said. “The island’s spectacular three rock formation, formed over 200 million years ago, is symbolic of the timeless heritage and strong foundation that is at the core of each of the three founder-led brands in our global fashion luxury group.”
The deal confirms a report on WWD.com Sunday that numerous strategic buyers, including Kors, were looking at the company and that a transaction was near.