Versace on verge of sale to Michael Kors

Versace for sale? Italy's family fashion house rumoured to be bought out

Versace for sale? Italy's family fashion house rumoured to be bought out

While Kors would be adding a major brand with worldwide global status to its business, the Versace business still needs work, according to Neil Saunders, managing director of GlobalData Retail.

Sources told the newspaper the official announcement from Milan would come Tuesday, when creative director Donatella Versace has scheduled a staff meeting, but that confirmation of the news could come within hours.

Versace, the Italian fashion house founded by Gianni Versace 40 years ago, is set to be bought by Michael Kors, according to reports.

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

USA fashion brand Michael Kors is close to buying celebrated Italian design house Versace, according to several news sources, including Reuters, Bloomberg, and The Wall Street Journal.

Headquartered in London, Michael Kors who has its roots are in the United States, could announce a deal as soon as this week, said the reports which cited unnamed sources. "Would Michael Kors have what it takes to succeed in this?"

"They gradually persuaded the family to look into a possible sale and introduced them to a series of buyers, including Michael Kors", the person added.

Blackstone Group LP owns 20 percent of Versace, which sells leopard-print sweatshirts for 2,100 euros ($2,470) and 995-euro tartan-covered sneakers.

While she has since recovered and still runs Versace, the company is only modestly profitable, generating about $18 million in profits on $822 million in sales past year.

An acquisition by Michael Kors would be a landmark deal for the fashion industry, with an American company taking over an Italian icon. Versace declined to comment.

Givi in turn is half-owned by Allegra Versace Beck, daughter of Donatella and niece of late founder Gianni. For Hitchmough, this will allow the brand to "annex further super luxury brands" without the "taint and consumer backlash of going under a more populist high street name".

As part of the deal, Blackstone will fully exit Versace, while the family, which owns the rest of the fashion house via a holding company called Givi, will keep a role, the sources said.

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.

Versace had revenue of €686m euros and returned to profit in 2017, according to figures provided by the company.

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