Versace Set To Be Sold To Michael Kors For $2bn


People are begging Versace to reconsider the deal, with fans commenting on Donatella Versace's Instagram saying Michael Kors would "kill" the brand.

According to Business of Fashion, Michael Kors Holding Ltd. could soon be the new owner of Gianni Versace SpA.

The leader of the pack is every mom's favorite handbag maker, Kors.

It has been reported that on Tuesday, Donatella Versace -who has run the company with her brother Santo Versace, since the murder of their brother and label founder Gianni was murdered in 1997- has called a meeting with employees to announce the sale.

Investors were skeptical: Shares in Michael Kors dropped 7% on Monday.

The stark difference between Michael Kors and Versace has some fans revolting against the rumoured deal on social media.

Rumours of an IPO have resurfaced since the company sold a 20 per cent stake to private equity giant Blackstone in 2014. However, Versace has struggled to grow sales, despite a luxury-fashion boom led by Chinese consumers.

Walk into my parlor: Greek spiders spin giant web over shore
The Tetragnatha spiders - known as "stretch spiders " - are known for building enormous webs for mating when it's hot and humid. A Greek beach has been turned into an arachnophobe's worst nightmare, as spiders have covered it in a web some 300 metres long.

"Kors has not fully integrated the [Jimmy Choo] business", Wells Fargo analyst Ike Boruchow wrote, adding that a Versace deal is "possibly doing too much too quickly".

"This name is further embodied by the company's founder Gianni Versace and chief designer Donatella Versace". She is artistic director of the fashion house.

Versace does not disclose its financial details, but documents deposited with the Italian chamber of commerce show the Milan-based group previous year posted sales of €668 million ($1 billion Cdn) and earnings before interest, tax, depreciation and appreciation (EBITDA) of €44.6 million ($67.7 million Cdn).

Just a year ago Michael Kors purchased British heel maker Jimmy Choo for $1.2 billion, as the company continues to try and expand its high-end portfolio.

"Blackstone wasn't going to put any more money into it". No matter what happens to the Versace brand, the Versace family will be involved within the company regardless.

He added that the biggest challenge for Versace will be to re-energise the brand and make it relevant to younger generations, particularly in Europe and Asia, while keeping a smooth and productive relationship with the family.