In July, when Michael Kors bought Jimmy Choo for $1.2 billion dollars, we wondered what that meant for business. Would Choo add lower-priced (read: more accessible) shoes to its product range? Or perhaps Kors is banking on a wealthier, more luxury-minded consumer to turn its business around? On Tuesday, Kors confirmed the latter with the news it would acquire Italian fashion house, Versace.
Business of Fashion is reporting the deal will happen to the tune of $2.12 billion and is expected to be finalized by the end of 2019. Michael Kors Ltd. — Kors' fashion company the designer started in 1981 — will be renamed Capri Holdings. We saw a similar rebranding after Coach Inc. acquired Kate Spade and Stuart Weitzman, becoming Tapestry Inc. Now the race is on to see which newly-formed umbrella of brands can truly build the first American luxury conglomerate.
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Capri Holdings' plans for Versace include increasing the number of stores globally from 200 to 300, building out its e-commerce strategy, as well as expanding men's and women's footwear and accessories business. "I am proud that Versace remains very strong in both fashion and modern culture," Donatella Versace said in a statement. "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," she said. "Santo, Allegra, and I recognize that this next step will allow Versace to reach its full potential."
In a statement, Capri Holdings chief executive and CEO John D Idol said Donatella will continue to lead creative at the company. "Donatella’s iconic style is at the heart of the design aesthetic of Versace," he said. I am thrilled to have the opportunity to work with Donatella on Versace’s next chapter of growth."
As an analyst put it to BoF, combining Michael Kors, Jimmy Choo, and Versace may not make sense initially, but when given a second thought, you realize each brand does have a certain aspirational shine that plays nicely off of each other. "Kors is jet-setting; it’s a little over-the-top at times and it’s got some bling — that would fit the Versace [aesthetic]," BlueFin analyst Rebecca Duval said. "But luxury really is on fire right now overall."