Michael Kors buys Versace in bid to enter high-end fashion
Deal worth more than $2B will help handbag maker crank up glamour to fire up sales
NEWYORK— Michael Kors is buying the Italian fashion house Versace in a deal worth more than $2 billion U.S. (1.83 billion euros), continuing its hard charge into the world of highend fashion.
The deal on Tuesday comes just 14 months after the New York handbag maker spent $1.35 billion adding to its portfolio Jimmy Choo, the shoemaker that rocketed to fame on the high heels of Sex and the City.
Like others in the fashion industry, Michael Kors Holdings Ltd. is trying to fire up sales by cranking up the glamour. Tapestry, once known as Coach, acquired Kate Spade last year. Like Coach, Michael Kors is changing its name as it seeks to reframe how people perceive it.
Michael Kors is still the chief creative director and the honorary chairman, but his company will be renamed Capri Holdings Ltd. as it brings more big names under its umbrella, it was announced Tuesday.
Bringing in Versace adds a layer of glitter to the company, which sells handbags for less than $500. Versace bags can fetch five times that figure.
Versace’s flamboyant styles have invoked collective gasps, perhaps most notably when Jennifer Lopez appeared at the 2000 Grammy Awards in a navel-bearing dress.
Versace’s fall styles include midi-dresses with baroque print for $2,950, and vinyl skinny jeans for $1,250.
The deal is expected to close in the fiscal fourth quarter. Shares of Kors rose almost 2 per cent before the opening bell.