Michael Kors has taken monumental steps in the race to build America’s first luxury conglomerate. The brand is buying Italian fashion house Versace for a value of approximately $US2.12 billion, including debt. That amount is currently 2.5 times the brand's current revenue, and 22 times its EBITDA (earnings before interest, taxes, depreciation and amortisation).
The news comes following Michael Kors’ acquisition of Jimmy Choo for $US1.35 billion in July last year.
Under the new organisation, Michael Kors will remain the chief creative director and the honorary chairman, but his company will be renamed Capri Holdings Ltd as it brings more big names under its umbrella. Versace chief executive Jonathan Akeroyd will continue on – as will creative director Donatella Versace, who in a statement said: “This is a very exciting moment for Versace.
“[Our stake in the business] demonstrates our belief in the long-term success of Versace and commitment to this new global fashion luxury group.
“I am proud that Versace remains very strong in both fashion and modern culture. Versace is not only synonymous with its iconic and unmistakable style, but with being inclusive and embracing of diversity, as well as empowering people to express themselves. Santo [Versace’s brother], Allegra [Versace’s Daughter] and I recognise that this next step will allow Versace to reach its full potential.
