Michael Kors Close to Buying Versace, Reports Say

Michael Kors Close to Buying Versace, Reports Say

Michael Kors Close to Buying Versace, Reports Say

Donatella Versace, the brand's artistic director and vice-president of the group, has called a staff meeting in Milan for Tuesday, according to the Corriere della Sera newspaper.

Shares in Michael Kors were trading 9% lower on Monday.

Another measure both brands should take is also separating Michael Kors (the founder) from this process (at least publicly) to help in quelling some of the negative sentiment surrounding the move.

Versace does not disclose its financial details, but documents deposited with the Italian chamber of commerce show the Milan-based group past year posted sales of €668 million ($1 billion Cdn) and earnings before interest, tax, depreciation and appreciation (EBITDA) of €44.6 million ($67.7 million Cdn). Sales of Kors' own brand, which was built on the success of accessibly priced designer handbags and watches, have suffered in recent years.

A spokesperson for Michael Kors did not immediately comment on the reports.

Kors, which made its name with affordable leather handbags, a year ago paid $1.35 billion for footwear company Jimmy Choo.

The deal with Michael Kors would come after the rumoured retreat of Kering, the French fashion giant which owns luxury brands like Gucci, Yves Saint Laurent and Alexander McQueen.

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"Blackstone wasn't going to put any more money into it. It was overpriced", the source said.

Others worry that the reported price tag for Versace looks rich. Versace, whose namesake designer was gunned down in 1997 by aserial killer, is a brand that "some perceive as past its peak", said Craig Johnson, president of Customer Growth Partners. "They needed a buyer who could make heavy investments".

The Versace family, which now owns 80 percent of the fashion house via a holding company called Givi, will receive 150 million euros of the purchase price in Capri shares.

Versace was the brainchild of Gianni Versace, who was born in Calabria to a dressmaker mother and presented his first signature collection in 1978, with his brother Santo taking care of the label's business arm.

Blackstone, whose stake acquisition valued Versace at $1.4 billion in 2014, declined to comment.

Versace reported sales of €686m in 2016.

Versace had revenue of €686m euros and returned to profit in 2017, according to figures provided by the company.

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