Fashionable chins have been wagging for quite some time now but earlier this week it was finally confirmed that Michael Kors Holdings have officially purchased Versace for a grand total of $2.12 billion.
But what exactly does this purchase mean and where does it leave Versace?
Firstly, no, Versace will not become Michael Kors – just like Jimmy Choo didn’t when purchased by Michael Kors Holdings in July 2017 for $1.2 billion. Versace is still Versace and more importantly, Versace isn’t over.
Upon acquiring the brand, Michael Kors Holdings will now officially be known as Capri Holdings. As for where the purchase leaves Versace, BAZAAR.com reported:
“The Versace family will become shareholders of Capri Holdings Limited, with Donatella keeping her role as Creative Director of the fashion house. Capri Holdings now has three major fashion houses under its portfolio: Michael Kors Collection, Jimmy Choo and Versace.”
In basic terms Capri Holdings is a conglomerate which means it’s a large corporation in the fashion industry run as a single business but made up of several firms – brands in this case – that are acquired through mergers and acquisitions. When it comes to the fashion industry, despite playing a major role on the world stage, only a small handful of companies actually dominate the industry. These include LVMH who, among many others, own Dior, Louis Vuitton, Fendi, DKNY and Givenchy. Another influential player is the Kering Group who own Gucci, Bottega Venneta, Balenciaga and Saint Laurent, to name a few.
In their acquisition of Jimmy Choo last year and now Versace, Michael Kors Holdings have set themselves apart from other conglomerates in the fashion industry who tend to grow in scale and revenue exclusively through licenses, diffusion lines and acquisition of more mass-market labels.
In the official press release, CEO of Michael Kors Holdings Limited said, “The acquisition of Versace is an important milestone for our group…We believe that the strength of Michael Kors and Jimmy Choo brands and the acquisition of Versace, position us to deliver multiple years of revenue and earnings growth.”
Many will be relieved and reassured by the knowledge that Donatella will remain at the helm of the brand, continuing to propel the creative vision of the brand. Versace’s statement on the matter read, “This is a very exciting moment for Versace. 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 unmistakeable style, but with being inclusive and embracing diversity as well as empowering people to express themselves. Santo, Allegra and I recognise that this next step will allow Versace to reach its full potential.”
While the Versace fan base may not appear so sure about the change, Donatella herself certainly seems to be excited for the future of the brand following the acquisition.
Followers and loyal customers of the brand fear the Kors influence – known for being easy, breezy, American-style as opposed to the adventurous and ultra-luxe style of the Italian brand – will alter the risk-taking allure of the brand. Fear of market saturation is also held at the forefront of fan’s minds as we’ve watched Kors’ partnership lines expand rapidly – fragrance, timepieces, accessories – meanwhile Versace currently only has one sister brand Versus Versace. Scaling Versace into new avenues of revenue is definitely a possibility, just perhaps not in the same way that’s proved successful for Michael Kors and its customer base and certainly isn’t a strategy to be implemented immediately.
Donatella referenced the expansion options and briefly stated, “We believe that being part of this group is essential to Versace’s long-term success.” She continued, “My passion has never been stronger. This is the perfect time for our company, which puts creativity and innovation at the core of all its actions, to grow.”
If it’s good enough for Donatella, it’s good enough for us, I guess. Only time will tell what this acquisition will truly mean for the brand.