American luxury goods retailer Michael Kors has agreed to buy the Italian fashion house Versace in a $2.12 Billion deal. The acquired company will be renamed to Capri Holdings as part of a luxury multibrand strategy. Michal Kors plans to double Versace’s revenues, bringing them to $2 Billion annually by expanding the number of stores from 200 to 300 and accelerating e-commerce development. As a result of the acquisition, Capri will benefit from some cost-saving synergies when it comes to getting better deals on real estate and media.
“The acquisition of Versace is an important milestone for our group. We are committed to investing in its growth.”, said in a statement John Idol, Michael Kors Chief Executive Officer. He will now be Chairman and CEO of both Michael Kors and Capri Holdings.
Current Versace executives Jonathan Akeroyd and Donatella Versace will remain part of the company as they believe in its future:
“This is a very exciting moment for Versace,” said Donatella Versace in a statement, adding that her brother Santo’s and daughter Allegra’s stake in Capri demonstrate their belief in the long-term success of Versace and commitment to the global luxury fashion group.
Acquisitions in the sector are not rare, as the Versace deal is the third billion-dollar transaction made by Kors or chief competitor Tapestry Inc. since last summer. The two rivals are shopping actively for high-profile fashion labels to add to their portfolios.
