Michael Kors buying Versace for $2bn

Why Michael Kors Is on the Verge of Buying Versace

Why Michael Kors Is on the Verge of Buying Versace

If confirmed, Versace would be the latest addition to a growing brand portfolio for Michael Kors holdings.

Gianni Versace's fashion empire will fall into American hands 21 years after the Italian designer was murdered outside his mansion in Miami.

However according to Neil Saunders, managing director of consultancy GlobalData Retail, both Versace and the Michael Kors brand still have issues to address to improve their appeal.

Michael Kors, whose roots are in the United States but which is headquartered in London, could announce a deal as soon as this week, said the reports, which cited unnamed sources.

Several Parties Italian newspaper Corriere della Sera reported earlier that Versace could be sold this week for about $2 billion, with several groups interested including Kors and Tiffany & Co.

Blackstone Group LP owns 20 percent of Versace, which sells leopard-print sweatshirts for 2,100 euros ($2,470) and 995-euro tartan-covered sneakers.

Why Michael Kors Is on the Verge of Buying Versace
Versace luxury fashion house 'to be sold shortly': Report

There was no immediate comment from either of the fashion companies.

While Kors would be adding a major brand with worldwide global status to its business, the Versace business still needs work, according to Neil Saunders, managing director of GlobalData Retail.

But word that a deal is close sent Kors shares down nearly 9 per cent to as low as US$66.33 in NY on Monday, the biggest intraday drop since May 30. Versace designs, manufactures and distributes clothes, jewellery, watches, eyewear, accessories and home furnishings that bear the company's distinctive Medusa logo.

Versace reported sales of €686m in 2016.

It is unclear whether the Versace family, which has controlled the brand for decades, would remain as minority shareholders in the business or if Donatella Versace would stay on as creative director. "I believe he is going to create some sort of brand diffusion with the essence of Versace's DNA". Donatella herself owns 30 percent of the holding, with the remainder in the hands of her brother Santo. She presented her latest collection for next spring and summer last Friday during Milan Fashion Week and was honored on Sunday by the Italian Fashion Chamber.

India, Pakistan foreign ministers to meet on UNGA sidelines in NY
In his letter, Khan also said the two countries need to pay "close attention" to resolving the Siachin and Sir Creek issues. There has been no action against the mastermind and executors of the Pathankot, Uri and the subsequent terror attacks.

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