Michael Kors and Ver­sace to Join Forces in $2B Deal

Shoes & Accessories - - The Month That Was -

Michael Kors Hold­ings Ltd has an­nounced that it has en­tered into an agree­ment to ac­quire all out­stand­ing shares of Ital­ian lux­ury fash­ion house Gianni Ver­sace for an en­ter­prise value of $2.12 bil­lion.

“The ac­qui­si­tion of Ver­sace is an im­por­tant mile­stone for our group. For over 40 years, Ver­sace has rep­re­sented the epit­ome of Ital­ian fash­ion lux­ury, a tes­ta­ment to the brand’s time­less her­itage,” said Michael Kors’s chair­man and CEO John Idol. “We are ex­cited to have Ver­sace as part of our fam­ily of lux­ury brands and we are com­mit­ted to in­vest­ing in its growth.”

Idol said he ex­pects Ver­sace to grow to over $2 bil­lion in rev­enues and fore­sees “mul­ti­ple years of rev­enue and earn­ings growth.” As part of its long-term ex­pan­sion strat­egy, Michael Kors plans to add 200 to 300 Ver­sace stores in­ter­na­tion­ally and ac­cel­er­ate the firm’s om­nichan­nel de­vel­op­ment.

“I am proud that Ver­sace re­mains very strong in both fash­ion and mod­ern cul­ture,” said Donatella Ver­sace, who took over the busi­ness 20 years ago — along with her brother Santo and daugh­ter Al­le­gra. “Santo, Al­le­gra and I rec­og­nize that this next step will al­low Ver­sace to reach its full po­ten­tial. We are all very ex­cited to join a group led by John Idol, whom I have al­ways ad­mired as a vi­sion­ary as well as a strong and pas­sion­ate leader. We be­lieve that be­ing part of this group is es­sen­tial to Ver­sace’s long-term suc­cess. My pas­sion has never been stronger. This is the per­fect time for our com­pany, which puts cre­ativ­ity and in­no­va­tion at the core of all of its ac­tions, to grow.”

In con­junc­tion with the de­vel­op­ment, Michael Kors an­nounced that it will change its name to Capri Hold­ings Ltd. — in­spired by the Ital­ian lux­ury des­ti­na­tion is­land of the same name — upon clos­ing the ac­qui­si­tion. Donatella, Al­le­gra and Santo Ver­sace will also be­come share­hold­ers in Capri Hold­ings. Ver­sace CEO Jonathan Akeroyd will re­main in his post.

“Since I joined Ver­sace over two years ago, our fo­cus has been on lever­ag­ing the com­pany’s her­itage and strong brand recog­ni­tion world­wide, which has al­lowed us to ex­pe­ri­ence sig­nif­i­cant growth in all re­gions,” Akeroyd said. “Donatella’s un­matched vi­sion has led to the con­tin­ued and grow­ing suc­cess of our brand. I am thrilled to be join­ing Capri Hold­ings Lim­ited, which will be in­stru­men­tal in ac­cel­er­at­ing our growth glob­ally.”

The ac­qui­si­tion — which spurred spec­u­la­tion at Mi­lan Fash­ion Week— is ex­pected to be di­lu­tive to Michael Kors’ earn­ings per share in the high sin­gle dig­its in fis­cal 2020, ac­cre­tive in the low sin­gle dig­its in fis­cal 2021 and ac­cre­tive in the high sin­gle dig­its in fis­cal 2022.

Michael Kors ex­pects its pro­cure­ment of Ver­sace to grow its over­all rev­enues to $8 bil­lion in the long term. The New York-based com­pany last year made its first ma­jor move in be­com­ing a global lux­ury player when it snapped up British shoe la­bel Jimmy Choo for $1.2 bil­lion.

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