Premium clothing brand Michael Kors Holding Ltd (NYSE:KORS), most famed for its handbags and watches, is reportedly working out a deal to buy Gianni Versace SpA. Will we see a Versace acquisition this week?
The Italian fashion house is looking for a buyer according to reports and has drawn interest from several parties. Sources close to both companies have spoken about this potential Versace acquisition. However, no official comments have been made.
Versace Acquisition
The Versace family still owns 80% of the company, with the remaining 20% owned by private equity firm Blackstone Group LP. The firm is also planning on selling its stake in the deal.
Versace Fashion is defined by its baroque designs and extravagant prints. Its clothing line can see sweatshirts cost $2,500 and sneakers around $1,000.
The Versace acquisition is estimated at $2 billion USD
Donatella Versace, the firm’s artistic director and vice-president, has run the company with her brother Santo Versace after the murder of their sibling Gianni in 1997. She has reportedly called a staff meeting in Milan for Tuesday and is expected to formally announce the deal.
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According to Jonathan Akeroyd, chief executive of Versace, the company is expecting annual turnover to exceed €1 billion this year. Previously, it reported sales of €686 million in 2016.
Michael Kors
Michael Kors previously bought famous shoemaker Jimmy Choo Plc for $1.2 billion. It is also planning a massive expansion with Tapesty Inc. to build a US-based multibrand fashion empire. Now it might have a Versace acquisition to add to its portfolio.
Despite the news, Michael Kors stock dropped 8.56% once the market opened today. That is a significant drop and the day is still very young. Are investors wary of this acquisition potential?
Michael Kors reported a decline in sales in America this year but did recover in the latest quarterly results. Will the Versace acquisition be officially announced tomorrow? We will wait patiently and see.
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