‘Fashion is dead’: Versace sale rocks fashion world
VERSACE is the latest Italian fashion house to be bought by a foreign entity, a trend that has raised concerns about the future of the made-in-Italy marquee.
MICHAEL Kors is buying the Italian fashion house Versace in a deal worth more than $US2 billion ($A2.75 billion), continuing its hard charge into the world of high-end fashion.
The deal that was put in place on Tuesday comes just 14 months after the New York handbag maker spent $US1.35 billion ($A1.86 billion) adding to its portfolio Jimmy Choo, the shoemaker that rocketed to fame on the high heels of Sex And The City.
To say that the sale has caused a ripple in the fashion world is putting it mildly. The Twitter reaction has been strong:
Michael Kors?!! Wow...Versace. At least now we will be able to find you at Tjmaxxx. It was nice knowing you @versace
— Drake Bell (@DrakeBell) September 25, 2018
WORST NEWS OF THE WEEK! 😩🤯😡 now you Michael Kors hoes about to ruin a legendary line https://t.co/Tvt9iPah34
— . (@georgenykov) September 26, 2018
Can't believe Donatella sold out to Michael Kors
— ROCK-see COT-tin (@BlondeClarityBB) September 25, 2018
don’t wear anything ‘designed’ by michael kors, that’s social suicide
— ð”šð”¥ð”¬ð”¯ð”¢ ð”¬ð”£ ð”…ð”žð”Ÿð”¶ð”©ð”¬ð”« (@soviethooker) September 26, 2018
Good morning to everyone EXCEPT Michael Kors....
— LA DOÑA (@BrigitteYasamin) September 25, 2018
since y'all are clearly confused about this whole versace thing. michael kors bought 20% of the shares of versace for 2 billion not the whole company. donatella is still creative director and the family owns 80% pic.twitter.com/msLuS2OjBg
— ℘ (@saintlaurih) September 25, 2018
Michael kors can’t even pronounce Versace
— effortless (@givenchydiamond) September 25, 2018
Like others in the fashion industry, Michael Kors Holdings Ltd is trying to fire up sales by cranking up the glamour.
Tapestry, once known as Coach, acquired Kate Spade last year. Like Coach, Michael Kors is changing its name as it seeks to reframe its public perception.
Michael Kors remains the chief creative director at Kors, but the expanding company will be renamed Capri Holdings Ltd, with $US8 billion ($A11 billion) in projected annual sales. Versace will be a key engine of growth, executives said.
Bringing in Versace adds a layer of glitter to the company, which sells handbags for less than $500. Versace bags can fetch five times that figure. Versace’s flamboyant styles have invoked collective gasps, perhaps most notably when Jennifer Lopez appeared at the 2000 Grammy Awards in a navel-baring dress.
It is just the latest major Italian fashion house to be folded into the portfolio of a foreign entity, a trend that has raised no shortage of concern about the future of the made-in-Italy marquee.
French conglomerates have been the biggest buyers, with Kering buying Gucci, Bottega Veneta and Pomellato, and LVMH taking on Bulgari and Loro Piana. The Qatari royal family owns Valentino.
Gianni Versace founded the brand in 1978, becoming a major force bringing to prominence Milan ready-to-wear and serving as a daring, sexy counterpoint to Giorgio Armani’s more subdued elegance.
Gianni Versace’s flashy, rock ’n’ roll designs and Medusa logo became emblematic of a generation led by Princess Diana and Madonna. He also helped create supermodels, like Naomi Campbell, Cindy Crawford and Claudia Schiffer and was the first to bring celebrities to the front row.
The family-run business was thrown into chaos with Versace’s murder 21 years ago. His sister, Donatella Versace, took over creative direction, while his brother Santo continued on the business side. It had been eyeing a public listing for several years.
The Versace family still controls 80 per cent of the company. The investment firm Blackstone owns the remaining 20 per cent.
Donatella Versace presented her latest collection for next spring and summer last Friday during Milan Fashion Week.
“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.”
Donatella, who holds a 20 per cent stake in the business, will stay on as creative director and the family will become shareholders in the larger business. Santo now holds a 30 per cent stake and Allegra, 50 per cent.
“With the full resources of our group, we believe that Versace will grow to over $2 billion in revenues,” said John Idol, chairman and CEO of Michael Kors.
“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.” On Tuesday, it was announced that Kors plans to open 100 new Versace stores (there are 200 in operation) at the same time that it amplifies online sales of the brand. There are also plans to increase Versace’s men’s and women’s accessories and its footwear business from 35 per cent to 60 per cent of its overall brand’s sales.
Though sales at Versace have been growing stronger recently, the business had been sputtering. And despite some progress, Michael Kors hasn’t fully rebounded from its malaise. It’s trying to rebuild its reputation after broadly distributing its products to department stores and outlet malls, which damaged its image.
Keeping the family involved and Donatella as the creative engine at Versace are both good ideas, said Neil Saunders, managing director of GlobalData Retail. The size of the company will provide Versace with a more global reach, especially in Europe and Asia, he said.
“All that said, we maintain our view that Versace is not a perfect operation,” Saunders said. “While it is iconic and high profile, there is a lot of work to be done to position it for higher growth. This will absorb both time and money from the group and has to be done in tandem with the ongoing efforts to put Michael Kors firmly on the right track.”
The deal is expected to close in the fourth quarter. Shares of Kors rose more than 1 per cent.
— with AP
Aussie fashion icon dead at 60
Tributes are flowing for an iconic Australian fashion designer who died at the age of 60 after a short battle with a rare brain condition.
Giant takeover shocks high-fashion world
The acquisition will create a luxury group with revenues of more than $10 billion.
Aussie fashion icon dies aged 73
The legendary fashion designer Perri Cutten had been a mainstay of women’s wardrobes across the country for more than 40 years.