Remember hearing about Michael Kors buying Versace for $2 billion in September last year? Well, the new year has just made things official: the deal is complete. With the development, Michael Kors Holdings, which now goes by the name Capri Holdings—more on that later—has three luxury brands under its name: Michael Kors, after which the group is initially named, Jimmy Choo, which was acquired in 2017, and fashion house Versace, perhaps the biggest and most surprising buy of last year. John Idol, chairman and CEO for the group, has declared that the acquisition now establishes the holdings company as one of the leading luxury groups internationally.
Idol states that buying Versace was an important milestone for Capri Holdings, and indeed it is, especially since the Italian fashion house has long been equated to Italian luxury. Capri Holdings is looking forward to the growth of Versace, stating that with its capacities it should be able to increase its current profits to over $2 billion in the future.
Capri Holdings’ plans for Versace include increasing its presence through brick and mortar stores, as well as improving its online channels. In the following years, the company will add 200 to 300 more stores globally, particularly in Europe and Asia. The brand will also have to set its focus on the selling of shoes and accessories, which currently account for about one-third of the Italian fashion house’s profits; Capri intends for the earnings from the aforementioned categories to eventually be more than half of the brand’s total. The American holdings company has previously succeeded in increasing the profits for Jimmy Choo, and a similar approach is also being taken up by Michael Kors.
Donatella Versace will remain as the house’s chief creative officer, alleviating concerns regarding the creative direction that the brand will take. We have yet to see if the plan works for Versace, and if it will be able to deliver the higher demand for accessories and footwear. Jonathan Akeroyd will also stay put as Versace’s chief executive officer. The British exec has been appointed to the position in 2016, coming from a 12-year stint as chief executive for Alexander McQueen.
As you may have already surmised earlier, the arrival of 2019 also makes another change official: from now on, Michael Kors Holdings will be referred to as Capri Holdings. The name is taken from the Italian resort island Capri, which is known for being home to upscale accommodations and shopping destinations. Consequently, Capri Holdings will also go by a different ticker. From KORS, it will soon be listed as CPRI by the New York Stock Exchange.
Moving forward, Capri Holdings hopes to position itself stronger against the more prominent European luxury groups such as LVMH and Kering, something that no American holdings company has accomplished previously. It is targeting an $8 billion total revenue from the three companies that form Capri Holdings, with Michael Kors contributing to the largest chunk.
Image credits: Victor Boyko, Getty Images, The MDS, Rahi Rezvani, Michael Kors, EC Studio, Shutterstock, Harrison, Capri.com, Imaxtree