Michael Kors set to buy Versace for $2 billion

Getty Images  Antony Jones

US fashion group Michael Kors KORS.N has agreed to take control of Versace in a deal that could value one of Italy's most prized designers at $2 billion, sources familiar with the matter said on Monday.

Under the deal, private equity firm Blackstone Group will sell its current 20 percent holding, which it acquired in 2014.

It is unclear whether the Versace family, which has controlled the brand for decades, would remain as minority shareholders in the business or if Donatella Versace would stay on as creative director.

The deal is expected to close in the fourth fiscal quarter, subject to regulatory approvals.

So this news stands to make the Michael Kors fashion empire even more major.

Michael Kors, whose namesake label is best known for its leather handbags, has made no secret of its ambition to grow its portfolio of high-end brands after swooping on British stiletto-heel maker Jimmy Choo for $1.2 billion a year ago.

If confirmed, Versace would be the latest addition to a growing brand portfolio for Michael Kors holdings.

Michael Kors's sales in 2017 were $4.7 billion, up from less than $800 million in 2011 when the company went public.

Luxury fashion brand Versace according to reports will soon be sold.

Versace, one of the few Italian fashion companies which is still independent, is reportedly finalising the terms of the deal today. The shares had recovered since then, trading 15 per cent higher for the year through the end of last week, with Choo boosting the latest quarterly results. Versace and Michael Kors declined to comment.

Versace had planned to float the company on the stock market but put the plans on hold owing to unfavourable conditions.

LVMH, PVH Corp. and Tapestry also looked at Versace in recent months, according to a report on Sunday by Women's Wear Daily. Donatella Versace now serves as its creative director, while Santo Versace is its chairman.

Last year it returned to a net profit of just under 15 million euros compared with a net loss of 7.9 million euros the previous year. She closed the collection by walking the runway herself, arm-in-arm with 1990s models including Carla Bruni and Cindy Crawford.

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