Michael Kors to buy Versace for $2bn

Oscar PerrySep 27, 2018

It is evident that Michael Kors desires to make the shift to a recognised luxury brand.

Versace did not immediately respond to Business Insider's request for comment on the backlash.

Hallowed Italian fashion house Versace, one of the few remaining big names in the business under family control, is close to a deal to be acquired by growing luxury juggernaut Michael Kors.

The leader of the pack is every mom's favorite handbag maker, Kors.

Donatella Versace, the brand's vice-president and artistic director, has called an all-staff meeting for Tuesday to announce the deal, according to the Italian newspaper Corriere della Sera.

Shares of Kors fell 7.4 per cent to US$67.32 in mid-morning trading in NY.

She says the deal would now give Kors the ability to "properly compete with Kering's power brand, Gucci".

This won't be the first time that Michael Kors Holding Ltd. dropped a large amount of cash in order to take mega-successful brand under its wings.

Versace is 80% controlled by the late designer's family, with private equity firm Blackstone holding a 20% stake.

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Versace fans are revolting after reports that the iconic Italian designer is about to be bought by Michael Kors.

Versace has been in talks with other buyers, including French fashion house Kering, sources told Reuters, however Kering considered the price too high.

London-based Kors previous year snapped up shoemaker Jimmy Choo Plc for about 896 million pounds ($1.2 billion), expanding beyond its namesake brand.

Marketing has reached out to Versace, Michael Kors and Blackstone for comment.

Some on social media have argued that the deal would disrespect Gianni Versace, the brand's founder. "It was overpriced", the source said.

Models present creations at the Versace show during Milan Fashion Week earlier this month. The Versace family will continue to have a role in the company under any agreement, they said.

He added, " Versace has struggled to grow sales.

Last year it returned to a net profit of just under 15 million euros compared with a net loss of 7.9 million euros the previous year.

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