Michael Kors wants to ramp up its sex appeal. The New York-based brand is rumored to be closing a $2 billion (USD) deal to acquire Versace, as of Monday. Kors has been aggressively snapping up other brands to build its fashion portfolio. Last year, the company bought maker of expensive high heels, Jimmy Choo, for $1.2 billion.
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If the deal pans out, announcements could be made as early as this week, according to Reuters. Apparently, Blackstone, a private U.S.-based equity group, wants to divest itself of its 20% stake in Versace after underperformance. Versace only recently became profitable as of last year, after a loss of 7.9 million euros the previous year. Basically, the brand only recently started to recover from a slump.
When you look at Blackstone’s portfolio, though, it’s easy to see that their main focus isn’t on fashion. Perhaps, with the help of Kors, Versace could see real growth. But of course, not without the help of Donatella and her family, who will remain involved in the company if the deal pans out. It goes without saying that Versace without Donatella and Gianni’s legacy is worth next to nothing, though.
In the words of Donatella herself, “Creativity comes from a conflict of ideas,” which is exactly what we’re expecting from this sexy partnership. Versace is brand built on overt sensuality, whereas Michael Kors has built his legacy on defining “affordable luxury.” The intersection between these two brands will be interesting to watch play out.
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