Yes, Michael Kors is acquiring Donatella! Well, not exactly. His company is buying her company for $2.1 BILLION DOLLARS! Chairman and CEO of Michael Kors, John Idol (really his name) said,
“The acquisition of Versace is an important milestone for our group.“
After the deal closes, Michael Kors will change its corporate name to Capri Holdings, not in an homage to the pants but rather the,
“Iconic, glamorous and luxury destination.“
Kors said it plans to grow Versace’s sales to $2 billion annually, open more stores, improve the brand’s e-commerce services and expand its accessories and footwear businesses. It also said that Donatella would
“continue to lead the company’s creative vision.“
“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.“
Last year, Michael Kors bought Jimmy Choo for $1.2 billion and this purchase will help Kors compete with fashion groups like LVMH and Tapestry, the parent of Coach and Kate Spade.
KORS stock dropped 8% on the news that the Versace deal was happening and hasn’t yet rebounded. Sales for Kors in 2016 were $4.71 billion.
Neil Saunders, managing director of the consultancy GlobalData Retail, said that it was essential for Donatella Versace to remain with the company, saying,
“Her vast experience in luxury retail will be extremely valuable to the new group, especially as it ramps up international expansion.
It is notable that synergy savings are not a core part of the announcement today, which is perhaps a recognition of the fact that spending will be needed to create superior growth.”
In other words, an iconic brand, but it needs some help.
(Photos, Instagram; via CNN)