On the morning of September 25, Michael Kors announced that they would be buying Versace, Italian fashion house, for $2.1 billion. This comes after a booming market in the luxury market. Coach recently bought Kate Spade for a total of $2.4 billion in the summer of this year.
The news came to a shock of the fashion community since Versace is one of the last self family-owned businesses. This is the biggest effort from Kors wanting to build a fashion empire and after the deal is made the company will be named Capri Holding limited. The new name is meant to show off the fashion house in a more glamour and luxury light. Not only showcasing Michael Kors but other brands as a whole.
For years Kors has relied on shopping malls bringing in the revenue but malls are closing and online shopping is becoming a problem each day. Running out of places to go, he turned to buy out a luxury fashion company. In recent years, customers have actually turned to buy more luxurious brands such as...Versace.
Now let's settle this rumor before it even begins. Rumors of Donatella leaving Versace have been going on since I was born but she isn't leaving anytime soon. In a statement made by Donatella herself, "We believe that being part of this group is essential to Versace's long-term success."The Versace family will still be stakeholders in Capri Holding Limited and of course, the artistic director will still be doing what she does best... high fashion.
What to expect from this merge? A huge boost of Versace handbags, accessories, and shoes. Versace's main focus has always been their clothing but from now on their clothing might take a back seat as their focus will shift from clothing to accessories.
What they hope to happen in this merge is that they reach a bigger international market for Versace. Since it is an Italian brand it has had trouble reaching out to other countries and appealing to different consumers. They hope that changes by 2020 with the help of Kors.
Their long-term goal is to get revenue up to $8 billion. Not much will change internally for the staff and creators. The biggest changes to come are the money and accessories!
Now that we have all the facts about this merge, what are the real thoughts on this news? As a big fan of Versace, I am worried about what is to come.
Gianni Versace worked his whole life and ultimately died for this company. But now it's just a brand under a big corporate head. Some of the last standing fashion houses (Prada) pride themselves on being self-owned. It hits a soft spot for Versace though, a talented man creating fashion for all women and then later selling the company like it means nothing.
As Michael Kors became more famous, you saw his logo go from the runway to T.J. Maxx. Which I am in no way dissing T.J.Maxx (Maxxinista for life) but when you see everyone and their mom owning an MK bag it takes away from the brand. It's not luxurious once everyone owns it and honestly, it takes away from the actual product.
My worry for Versace is that I'll see those bags sitting in a department store thinking how Gianni would be disappointed. Yes, I do appreciate more access to these products and better prices. I do hope to be able to buy bags like this but I want to work hard in the process to own one. Once everyone has one it takes away from that special moment.
I only wish the best for this merge in companies. I hope they can take Versace to the next level but in the correct way to respect the Versace empire.