Michael Kors snaps up Italy's Versace

Cornelia Mascio
Settembre 24, 2018

The Italian fashion group is valued at $2 billion, according to Reuters.

Sources told the newspaper the official announcement from Milan would come Tuesday, when creative director Donatella Versace has scheduled a staff meeting, but that confirmation of the news could come within hours.

Versace, the Italian fashion house founded by Gianni Versace 40 years ago, has reportedly been sold to U.S. handbag and clothing brand Michael Kors for $2bn (£1.5bn).

Michael Kors has been looking to bolster its group of luxury retailers against rivals such as Louis Vuitton owner LVMH (LVMHF) and Tapestry, the parent of Coach and Kate Spade.

Blackstone, which had taken a 20 percent stake in Versace in 2014, will fully exit the Italian company.

After investing in Versace at a high multiple, Blackstone found the fashion group's performance disappointing and not sufficient to justify a market listing, said one of the sources, who is close to the family. While talks are advanced, no final agreements have been reached, the people said.

Meanwhile, Michael Kors previously acquired ladies shoe brand Jimmy Choo for $1.2 billion previous year. Now, it's vying with Coach owner Tapestry Inc.to build a US -based multibrand fashion empire along the lines of Paris-based conglomerates LVMH and Kering SA. Two of the three sources who spoke to Reuters said the company had agreed to pay a large premium for Versace, known for its Medusa head logo. The company had been working toward an initial public offering, though market conditions haven't allowed it to move ahead.

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