Michael Kors confirms Versace buy, renames itself Capri Holdings
The cat was already out of the bag yesterday but that didn’t detract from the impact of the news on Tuesday that Michael Kors is acquiring Versace for around $2 billion and changing its name to Capri Holdings.
A definitive agreement has been signed to acquire all of the outstanding shares of Gianni Versace S.p.A. for a total enterprise value of €1.83 billion or approximately $2.12 billion.
Kors CEO John D. Idol called it “an important milestone for our group. 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.”
It’s a stunning move for the company that made headlines when it acquired Jimmy Choo but lost out on Kate Spade to rival Coach.
So what happens now? Well, as part of the strategic plan for the long-term growth of Versace, Kors intends to grow it into a mega-brand that will justify its purchase price. That will include boosting store numbers to 300 from around 200 at present.
For Kors … sorry, Capri… itself, the purchase is an “opportunity to help grow group revenues to $8 billion in the long-term and diversify our geographic portfolio from 66% Americas to 57% Americas, 23% Europe to 24% Europe, 11% Asia to 19% Asia.”
And the Kors name change? The firm said: “Capri Holdings Limited is the new name to be adopted upon the closing of the acquisition. [It] is inspired by the fabled island which has long been recognised as an iconic, glamorous and luxury destination. 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 40-year-old Versace label has had its ups and downs over the years with the murder of its founder Gianni Versace having devastated the family-run firm. But it carried on, despite some challenges on the sales and profits front and has seen a renaissance in recent years. It remains a red-carpet favourite and has huge name recognition worldwide.
Idol added: “Versace has represented the epitome of Italian fashion luxury, a testament to the brand’s timeless heritage. We are excited to have Versace as part of our family of luxury brands, and we are committed to investing in its growth. With the full resources of our group, we believe that Versace will grow to over $2 billion in revenues.”
Donatella Versace will continue to lead the company’s creative vision and she said on Tuesday: “This is a very exciting moment for Versace. It has been more than 20 years since I took over the company along with my brother Santo and daughter Allegra. 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 recognise that this next step will allow Versace to reach its full potential.”
The three family members will all become shareholders in Capri Holdings and she said that this “demonstrates our belief in the long-term success of Versace and commitment to this new global fashion luxury group.”
Versace’s management team will continue to be led by CEO Jonathan Akeroyd with Idol saying that he and Donatella “have assembled strong senior management and design teams that will continue to lead Versace into its next chapter. We are extremely fortunate to be able to acquire such an extraordinary brand with an incredibly talented team.”
Akeroyd said that since he joined over two years ago, the focus has been on “leveraging the company’s heritage and strong brand recognition worldwide, which has allowed us to experience significant growth in all regions.”
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