Fashion company Michael Kors is buying Versace, the Italian luxury brand founded by Gianni Versace in 1978, for $2.12 billion. The two fashion houses made the announcement Today.
Donatella Versace, the artistic director of the Milan-based fashion house who helped lead the company after her brother’s death in 1997, said it’s the perfect time for the company to join with Michael Kors.
The deal, which would end the independence of one of the last prominent stand-alone fashion brands, is the biggest effort yet by Kors to build an empire. To reflect its growing collection of trophy brands, Kors said the company would change its name to Capri Holdings Limited once the deal is completed.
Kors described the purchase as a milestone in its expansion plans. The Michael Kors brand had its roots in the “middle market” of the luxury sector and relied on outlets and department stores, where deep discounting is common. But mall traffic has declined in North America — Kors’s biggest market — and shoppers too were changing, increasingly seeking brands at the extreme of the style and price spectrum.
Acquiring Versace, led by artistic director Donatella Versace, whose flamboyant gowns can sell for thousands of dollars, is part of the company’s strategy to woo more big spenders — and find more loyal customers in Europe and Asia. Last year, Kors bought the shoe designer Jimmy Choo for 896 million pounds, or $1.2 billion at current exchange rates.