Update: On September 25, Michael Kors Holdings confirmed a $2.1 billion takeover of Gianni Versace SpA, a move that has been described by Donatella Versace, the creative head of the Italian brand, as a “very exciting moment” that would “allow Versace to reach its full potential.” John Idol, CEO of Michael Kors, said Donatella Versace would continue to lead the creative side of the brand going forward. Meanwhile, Michael Kors Holdings will officially be renamed as Capri Holdings after the acquisition.
Michael Kors’ likely takeover of Versace comes at a time both companies are making aggressive, strategic and savvy pushes into the lucrative Chinese market. Their merger could change the luxury landscape in both China and the broader fashion industry.
U.S. fashion group Michael Kors Holdings Ltd. is said to be in talks to acquire Gianni Versace SpA in a deal that would value the Italian luxury powerhouse at around $2.1 billion Bloomberg reported on Monday, citing sources familiar with the matter.
Donatella Versace, sister of late founder Gianni, who doubles as artistic director and vice president of the Milan-based group, has reportedly called a staff meeting for Tuesday.
In recent months, Versace has been accelerating its expansion into the Chinese market. On September 9, Donatella Versace showed up in Shanghai to host the opening ceremony of a Versace pop-up exhibition at a high-end department store. The exhibition, titled “Join the Versace Clan,” gathered nearly two dozen Asian celebrities and fashion influencers and lasted for five days.
To celebrate Chinese Valentine’s Day, earlier this summer Versace launched a WeChat boutique store via mini-program — it’s first ever. The boutique store ran from July 27 to August 27, selling a wide range of Versace’s signature handbags with four of them being offered exclusively on that channel. Versace invited four Chinese female celebrities, Haden Kuo, Jiang Yiyan, Chen Yan and Chen Ran, to be featured in this campaign.
Meanwhile, at New York Fashion Week, Kors ramped up efforts to court the big-spending Chinese market, with visible success. The company’s courting of free-spending Chinese consumers, who are traditionally considered less discount-driven than U.S. counterparts, might help solve a sales problem Kors had in 2017 due to rampant discounts. If finalized, Kors’ purchase of Versace, would follow its purchase of high-end shoe retailer Jimmy Choo last year.
Versace was founded in 1978, and swiftly became world famous for both its designs and its Richard Avedon photography showcasing its look of lush patterns, metal trim, and extravagance. A merger with Kors is seen by some in the fashion world as an unlikely pairing of a stylish aspirational brand with an over-the-top Euro-name.
The move comes as both brands are apparently betting on the future of their growth in China, a country that the Boston Consulting Group projected to drive 70 percent of the global luxury growth by 2024.