Donatella Versace to stay on at Italian label and US fashion group to rebrand as Capri
Versace has been sold to the US clothing and handbags group Michael Kors for $2.1bn (1.64bn) in the latest example of a family-owned European brand taken under the control of a global fashion conglomerate.
Michael Kors, which last year bought London shoemaker Jimmy Choo for almost 900m, confirmed on Tuesday that it had bought Versace and would fold all three brands into a new company called Capri Holdings named after the favourite holiday island of wealthy fashionistas.
The deal will cement the fortunes of the heirs of Gianni Versace, the designer who founded the label 40 years ago and built its reputation by dressing some of the worlds most glamorous women, including Princess Diana, Demi Moore and Elizabeth Hurley.
The family owns 80% of the business, with Gianni Versaces niece Allegra Versace Beck, 32, holding a 40% stake worth 732m (654m). Allegras mother and Giannis sister, Donatella Versace, holding 16%, and Giannis older brother Santo owning 24%.
The family, who inherited the company after the murder of Versace outside his Miami mansion in 1997, will maintain a 150m stake in Capri Holdings. US private equity firm Blackstone, which bought 20% of Versace in 2014, will sell all of its holding.
Donatella Versace, 63, who is Versaces vice-president and artistic director, has committed to stay on at Capri Holdings and lead the companys creative vision.
This is a very exciting moment for Versace, she said. It has been more than 20 years since I took over the company along with my brother Santo and daughter Allegra. I am proud that Versace remains very strong in both fashion and modern culture. Versace is not only synonymous with its iconic and unmistakable style, but with being inclusive and embracing of diversity, as well as empowering people to express themselves.
She said the family believed that Versace had to be sold in order for the brand to reach its full potential. We believe that being part of this group is essential to Versaces long-term success, she said. 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.
John Idol, chairman and chief executive of Michael Kors, said buying Versace was an important milestone for the US company and that creating a family of luxury brands would deliver shareholders multiple years of revenue and earnings [profits] growth.
Michael Kors, which was founded by its namesake designer in 1981, is closing more than 100 stores and streamlining its products to reposition the brand as a more luxurious label. Kors is a minority shareholder of Michael Kors Holdings with US investment firms holding the largest stakes.
For over 40 years, Versace has represented the epitome of Italian fashion luxury, a testament to the brands timeless heritage, Idol said. With the full resources of our group, we believe that Versace will grow to [sales of] over $2bn [up from $509m in 2016, the latest year available].
We believe that the strength of the Michael Kors and Jimmy Choo brands, and the acquisition of Versace, position us to deliver multiple years of revenue and earnings growth. The company said it would increase the number of Versace shops from 200 to 300, and would increase the share of revenue raised from accessories and footwear from 35% to 60%.
Idol said Donatella Versaces iconic style would remain at the heart of Versaces design aesthetic.
However, fans of Versace took to Instagram and Twitter to implore the family to reconsider and not sell the brand. Dont let MKors buy any % of Versace. He will ruin it. He will kill it, one person commented on Versaces official Instagram account.
You sell off your heritage and Giannis memory for decadent money. I really hope you dont, but if its so, I will never buy from you anymore, another person wrote.
Donatella Versace said the companys decision to become shareholders in Capri Holdings demonstrates our belief in the long-term success of Versace and commitment to this new global fashion luxury group.
The takeover of Versace follows the sale of several other independent high-end brands to large conglomerates. Dior was sold to French group Mot Hennessy Louis Vuitton (LVMH), which owns Louis Vuitton, for $13bn last year. French billionaire Franois-Henri Pinaults Kering group assumed full control of Gucci in 2004 and also owns Yves Saint Laurent, Balenciaga, Alexander McQueen and Bottega Veneta.
This summer Italys Missoni family sold a 41% stake in the eponymous brand to a private equity venture backed by the Italian state for 70m, and Belgian designer Dries Van Noten sold a majority stake to Spanish luxury group Puig.
Chanel is the last major European luxury brand to remain in private hands. The company is owned by brothers Alain and Grard Wertheimer, grandsons of Pierre Wertheimer an early business partner of Gabrielle Bonheur Coco Chanel.