Michael Kors snaps up Versace for $2.1bn

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Donatella Versace with Versace chief Jonathan Akeroyd (left) and Michael Kors chief executive John Idol

US fashion giant Michael Kors has confirmed a $2.1bn takeover of Versace in a move that has outraged some fans of the Italian fashion house.

Creative director, Donatella Versace, has run Versace since the 1997 murder of her brother Gianni.

She called the sale a “very exciting moment” and “allow Versace to reach its full potential”.

Donatella will “continue to lead the company’s creative vision”, said Michael Kors chief executive John Idol.

Mr Idol said Versace represented the “epitome of Italian fashion luxury” and its acquisition was an important milestone for the company, which is being renamed Capri Holdings.

The new owner plans to increase the number of Versace outlets from 200 to 300 stores.

It also plans to more than double turnover to $2bn, partly by boosting the percentage of footwear and accessories – a category that is often more affordable and faster-selling – from 35% to 60% of revenues.

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Donatella Versace and Elton John in 1991

Versace’s vivid and distinctive brand has been worn by some of the world’s highest-profile stars and graced the pages of newspapers and magazines more often than almost any other luxury fashion brand.

A key moment came in 1994 when the unknown Elizabeth Hurley accompanied boyfriend Hugh Grant to the premiere of Four Weddings and a Funeral. The tabloids could not believe the sight.

Versace, until then just another Italian fashion brand, became synonymous with “That Dress”.

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Liz Hurley in “That Dress” – with Hugh Grant – at the Four Weddings and A Funeral premiere

The brand is most valued by the glitzier ranks of the famous, with Michael Jackson and Princess Diana among its fans. She attended Gianni Versace’s funeral, along with Elton John, who has also been a keen wearer of Versace.

The newer generation include Nicki Minaj, a clutch of Kardashians and Jenners, and the Beckham family, who are among the mere 161 people Donatella follows on Twitter.

But those fearing a despoiling of the Versace magic may be worrying unnecessarily.

Michael Kors is also known as a luxury brand, albeit way less exclusive and his lower price tags give him a far wider customer base.

He himself designed the first women’s ready-to-wear collection for high-end Paris fashion house, Celine.

Customers have included Taylor Swift, Angelina Jolie, the leading Trump women and Michelle Obama.

The business has gained new experience handling other luxury brands. Last year it bought Jimmy Choo, another tabloid fashion favourite, the luxury shoemaker founded in London, for almost £900m.

Versace is 80% owned by the family, with the remaining 20% owned by the private equity firm Blackstone Group.

It reported sales of €686m for 2016 and chief executive Jonathan Akeroyd said earlier this year that annual turnover was soon expected to exceed €1bn.

With Donatella herself staying on, it is possible fans will not notice any change. After all, why buy a well-loved business and tear up what makes it appealing?

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Gianni and Donatella Versace in 1996 – the year before the designer was murdered

Who is Michael Kors?

Born 1959 in Long Island, New York State.

Studied acting but decided to become fashion designer at aged 14.

Enrolled at the Fashion Institute of Technology in New York City but dropped out after only nine months to work at Lothar’s boutique in Manhattan.

In 1981, Kors launched his Michael Kors women’s label at upmarket New York store, Bergdorf Goodman.

Filed for Chapter 11 in 1993 but began again in 1997 with a lower priced line, while also becoming the first women’s ready-to-wear designer for French luxury fashion house, Celine.

Left Celine in 2003 to concentrate on his own brand.

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