It’s official: Versace has been bought by Michael Kors for $2.12 billion. This follows rumors of an acquisition of the Italian fashion house by the American holdings company, Michael Kors Holdings, but that’s not the only announcement made—the latter will now be going by Capri Holdings.
Although the purchase surprised many of Versace’s fans, the move has been anticipated after the group bought another high fashion house in the form of Jimmy Choo last year for $1.2 billion. The expansion has been eyed by John Idol, CEO of Michael Kors Holdings, wanting to widen the power and influence of the company to the likes of Kering and LVMH in Europe, and become a successful luxury group operating in the United States. Kering, with brands Gucci, Balenciaga, Bottega Veneta, Alexander Mcqueen and Saint Laurent under its name, has also vied to acquire Versace, and so did Tapestry Inc, which owns Stuart Weitzman, Kate Spade and Coach.
Over at Versace’s, Donatella Versace will still be at the creative helm of the fashion house, as well as becoming a shareholder of Capri Holdings together with her brother Santo and her daughter Allegra. Idol has reasoned that it will stay the way it was because the house matriarch is the heart of Versace, and in turn, the brand is an extension of her style and aesthetics. Donatella has expressed excitement through an official statement by the maison, saying that the move is momentous for Versace because being part of the group will pave the way for reaching the Italian house’s fullest potential and be pivotal in its success in the long run. She has likewise conveyed her admiration for CEO John Idol’s leadership.
A two-way merge and mixed reactions
It’s rare to see Versace and Michael Kors mentioned in the same breath. Although both are high fashion brands, one is known for its designs that epitomize Italian glamour, the other, an American company that treads towards the same direction in aesthetics but is less pronounced in its sauciness. In terms of hierarchy among luxury labels, the two are rather far apart, with Versace being the less accessible one. It’s natural to wonder how the development would affect and mutually benefit the Italian brand and the American company..
Versace’s influence, although bought at $2.12 billion, goes further and deeper than that. It may be a household name, but one that remains to be out of reach for many, and pushes forth a vision that is truly its own. This repute has hurt Versace financially, but Capri has promised to take measures to increase revenue, among them focusing on footwear and accessories, increasing brick and mortar stores, and improving online platforms. Capri also sees a $2 billion revenue to be brought in by Versace in the future. Meanwhile, having a respected house of Versace’s stature will help forward Capri’s position to rival that of Europe’s international luxury groups.
The reaction towards the news has been mixed, with others expressing concern over the creative direction of Versace. The house, after all, will be put under pressure to create more accessories and footwear to reach its target sales. There were also speculations that the move will gradually see Donatella relinquish her position and have the holdings group take over, although fears have been allayed by the Italian designer by saying that she will be here to stay. It bears clarification as some mistook the step to mean that Michael Kors will be in charge of the decisions in terms of design.
Others have wondered how this will affect Versace’s reputation. Michael Kors, after all, positions itself to be on the more affordable side of the scale and is often referred to as a “mall brand”. Luxury brands such as Versace have operated differently in history, and there are more to its plate such as its values rather than relying on sales alone.
Many found Jimmy Choo’s situation to be comforting, however. Since its acquisition, the public perception has not changed significantly. And so long as Versace maintains its unique vision, chances are, feelings of consumers towards the brand will still be the same. The profile of its customers may change, but that is still to be seen in the months and years to come.
Image credits: Getty Images, Michael Kors, Rex, Ovidiu Hrubaru, M DOGAN