Michael Kors Holdings Ltd (NYSE:KORS) just confirmed that it is going to buy the Italian luxury brand Versace. On Monday, rumors spread that Michael Kors was planning the acquisition but today, it was officially confirmed on their website.
Michael Kors Holdings Ltd
Michael Kors signed an agreement that it would acquire all of the outstanding shares of Gianni Versace for a total of $2.12 billion USD. Versace has been long recognized as one of the world’s leading luxury fashion companies.
John D. Idol, CEO of Michael Kors Holdings Limited, said:
“The acquisition of Versace is an important milestone for our group. Versace was founded in 1978. For over 40 years, Versace has represented the epitome of Italian fashion luxury, a testament to the brand’s timeless heritage. We are excited to have Versace as part of our family of luxury brands, and we are committed to investing in its growth. With the full resources of our group, we believe that Versace will grow to over US$2.0 billion in revenues. 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.”
This isn’t the first luxury brand Michael Kors has acquired. Back in 2017, the company purchased Jimmy Choo for $1.2 billion USD. This is an odd moment for luxury fashion, as Michael Kors is known for bringing fashion at affordable prices. As we all know, Versace and Jimmy Choo are far from affordable.
In any instance, Donatella Versace will remain a shareholder in Michael Kors and will stay a part of the company.
>> Michael Kors Versace Rumors
Name Change
Michael Kors Holdings Ltd also announced that it will change its name to Capri Holdings Ltd, to reflect the collection of brands that it has acquired thus far. Kors states that its latest acquisition is a milestone for the company and it will continue to grow its empire.
Michael Kors relied on ‘middle market’ buyers in the luxury brand sector, but mall traffic has declined in North America.
KORS Stock Movement
According to Yahoo Finance, KORS is trading at $68.24 a share, up $0.23 (+0.34%). On Monday, rumors spread that Michael Kors was buying Versace, and KORS shares dropped dramatically. It seems the stock has slightly recovered today after the acquisition was officially announced by the companies.
Featured Image: depositphotos/ozphotoguy
