Quinton Burnett | Staff Writer
Michael Kors Holdings Ltd. acquired Italian fashion house Versace for $2.1 billion on Sept. 25 during Milan Fashion Week, businesswire.com reported.
Upon release of this information, the internet rang Versace’s death knell throughout comment sections and replies web-wide.
But what does it really mean when one brand purchases another?
Fan and casual observer reaction is understandable. Michael Kors is not the first coupling one would suspect for Versace. Michael Kors, the American accessible luxury giant, and Versace, vaunted Italian house of super luxury, seems to be a commercial takeover of one of fashion’s great icons.
This is the second time in a little over a year Michael Kors (renamed Capri Holdings Ltd.) has made fashion news. Summer 2017, the company acquired luxury shoemaker Jimmy Choo in a $1.2 billion deal. The brand acquired Jimmy Choo Ltd. but made sure the creative direction remained under Sandra Choi and her team in place. This allowed the brand to not only remain independent but also provide greater capital.
The Versace deal is similar in that brand head Donatella Versace will remain at the helm. She was recently quoted in Harper’s Bazaar saying, “This is a very exciting moment for Versace. …We believe that being part of this group is essential to Versace’s long-term success. My passion has never been stronger. This is the perfect time for our company.”
Of the many aspects of running a brand, making sure the utilities are on in all of your facilities doesn’t get enough mention. By keeping the creative team on at Versace, Capri Holdings Ltd. is showing it aims to do that and let Versace focus on the much more publicized pieces of fashion, such as design.
To further ease anyone’s nerves, the company could turn to Capri CEO Jeff Idol’s assurances to Business of Fashion in 2017 that the brand would not repeat Michael Kors’ mistakes at Jimmy Choo. Idol said, “The learning is: be patient, and as luxury and consumers shift to online, be prepared to be there.”
So, Michael Kors bought Versace. What’s next for the brand? Details have yet to emerge on the Capri Holdings business strategy for the iconic house, however if recent action is any indication, there is nothing to worry about.
Fingers crossed that everyone is calm now. Yes, Michael Kors owns Versace. No, we won’t be seeing Donatella curating a Cruise selection for Ross. Versace will still produce noteworthy high fashion, but even high fashion needs money to run. Michael Kors will fund the company in order to help it produce more revenue.