Michael Kors takes over fashion icon Versace in $2 bln deal
(Adds details, quotes)
MILAN, Sept 25 (Reuters) - U.S. fashion group Michael Kors
has agreed to buy Versace in a deal valuing the revered
designer at $2 billion including debt, the companies said on
Tuesday, making it the latest Italian brand to fall into foreign
Michael Kors, whose namesake label is best known for its
leather handbags, has made no secret of its ambition to grow its
portfolio of high-end brands after buying British stiletto-heel
maker Jimmy Choo for $1.2 billion last year.
Versace, known for its bold and glamorous designs and its
Medusa head logo, was one of a clutch of family-owned Italian
brands cited as attractive targets at a time when the luxury
industry is riding high on strong demand from China.
"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," John
Idol, chairman and CEO of Michael Kors said.
As part of the deal, Michael Kors agreed to buy all of
Versace's outstanding shares for a total enterprise value of
1.83 billion euros ($2.2 billion), to be funded in cash, debt
and shares in Michael Kors Holding Ltd, which will be renamed
Capri Holdings Ltd.
U.S. private equity firm Blackstone, which bought 20 percent
of Versace back in 2014, will fully exit its investment.
The Versace family, which currently owns 80 percent of the
fashion house via a holding company called Givi, will receive
150 million euros of the purchase price in Capri shares.
"We believe that being part of this group is essential to
Versace's long-term success. My passion has never been
stronger," said Donatella Versace, sister of the company's late
founder, and artistic director and vice-president of the
After the deal, Versace CEO Jonathan Akeroyd will remain at
the helm of the company, while Donatella Versace will "continue
to lead the company's creative vision", Idol added.
The deal is expected to close in the fourth fiscal quarter,
subject to regulatory approvals.
Michael Kors said it plans to grow Versace's global sales to
$2 billion globally, boost its retail footprint to 300 stores
from around 200 at present and accelerate its e-commerce
strategy. It also plans to raise the share of higher-margin
accessories and footwear to 60 percent of sales from 35 percent.
Versace does not disclose its financial details, but
documents deposited with the Italian chamber of commerce show
that last year it posted sales of 668 million euros and earnings
before interest, tax, depreciation and appreciation (EBITDA) of
45 million euros.
($1 = 0.8485 euros)
(Reporting by Agnieszka Flak and Giulia Segreti; Editing by
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