Michael Kors ready to buy­out Ver­sace for US $ 2.35 bil­lion: Re­ports

Apparel Online - - Retail Current -

Ac­cord­ing to lat­est re­ports, Michael Kors Hold­ings Ltd. is all set to buy Gianni Ver­sace at a whop­ping deal worth US $ 2.35 bil­lion. The Ver­sace fam­ily will con­tinue to keep its stake in the com­pany as per re­ports. This ac­qui­si­tion will take Kors, best known for his af­ford­able lux­ury hand­bags, to cre­ate a more ef­fi­cient hold­ing busi­ness and will di­rectly ri­val its French heavy­weight con­glom­er­ate coun­ter­parts like Ker­ing (Gucci, Ba­len­ci­aga and Saint Lau­rent) and LVMH (who owns Louis Vuit­ton, Fendi and Givenchy). The fact that Ver­sace re­turned to profit in 2017 and re­ported rev­enue of nearly

US $ 800 mil­lion helps the en­tire trans­ac­tion.

Af­ter ac­quir­ing Jimmy Choo for US $ 1.2 bil­lion last year, Michael Kors is the sole Amer­i­can con­glom­er­ate at this scale and re­sources. Ta­pes­try, the hold­ing that owns Coach, has re­port­edly made sim­i­lar moves to adopt a like­wise model af­ter ac­qui­si­tion of Kate Spade and Stu­art Weitz­man. This makes own­ing a Euro­pean lux­ury fash­ion brand like Ver­sace an up­per hand to any sim­i­lar con­glom­er­ates in the US fash­ion in­dus­try. Cur­rently, the Ver­sace fam­ily owns the ma­jor­ity in the com­pany while 20 per cent stakes be­long to the pri­vate eq­uity firm Black­stone Group. Re­cently, Ver­sace also adopted a no-fur pol­icy com­pany-wide that aligns it with the Michael Kors’ sus­tain­abil­ity pledges that in­cluded go­ing fur-free as per an an­nounce­ment last year. Michael Kors Hold­ings is seek­ing profit av­enues by cash­ing in on Ver­sace’s mo­men­tum and high­pro­file glob­ally.

MK is also try­ing to com­pen­sate for re­cent losses by im­prov­ing their prod­uct qual­ity and hold­ing down dis­counts, as they be­lieved that sell­ing at off-price, re­tail­ers and mass-mar­ket dis­count stores de­graded the brand’s im­age in front of its loyal cus­tomers. Neil Saun­ders, the MD of the con­sul­tancy Glob­alData Re­tail, shared his opin­ion by say­ing that buy­ing Ver­sace would add a “big-hit­ting brand with true global sta­tus into Michael Kors’ sta­ble.”

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.