Worth $2 Billion…
T he deal that is worth an average of $2 Billion dollars is in the works as the U.S. fashion group Michael Kors has been fanning rumors of placing a bid which will indeed take control of the Versace design house by the end of the week. The addition of the Italian style house will give MK a major foothold in an industry which is still dominated by major European designers but not without saying that American style houses such as Coach and Kate Spade will also be vying for a similar reach. The deal will eventual move the high-end couture fashion label from under the Versace family for the first time in its history. The brand, which has been run by Versace’s heirs since its founders murder 21 years ago, also has been eyeing a public listing for several years.
Michael Kors, whose namesake label has become a house hold brand in the luxury handbag world and rated as a high-end with an affordable price tag, has made it no secret of its ambition to grow its portfolio of high-end brands after buying the European stiletto-heel maker Jimmy Choo for $1.2 billion last year and helping it go public.
According to WSJ, Versace’s revenue stagnated at roughly €700 million in 2017; the brand eked out a profit of €15 million last year. Whereas MK total revenue increased 10.8% to $1.18 billion, including a $107.9 million contribution from Jimmy Choo. On a constant currency basis, total revenue increased 7.2%. MK Retail revenue increased 4.4% to $600.6 million during the last quarter of 2017. All roads seem to point to MK holdings taking on the next design house leaving Louis V as the sole major European designer left.