Versace on verge of sale to Michael Kors, reports say
According to Italian media reports the company's vice-president, Donatella Versace, will announce the deal this week.
Versace, the Italian fashion house founded by Gianni Versace 40 years ago, has reportedly been sold to USA handbag and clothing brand Michael Kors for $2bn (£1.5bn).
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.
The Versace family owns the rest of the company.
The deal is expected to close in the fourth fiscal quarter, subject to regulatory approvals.
While Coach owner Tapestry has made moves to adopt a similar model, owning a European luxury fashion brand like Versace would give considerable clout and star power to an American fashion portfolio. Kors has been expanding into high-end brands, buying the luxury shoemaker Jimmy Choo for nearly $1.4 billion a year ago.
"Michael Kors is not buying Versace to keep its luxury business going", Mark Weber, fashion expert and former CEO of LVMH Inc., tells FOX Business.
Investors appeared mixed on the linkup; Kors' stock fell six percent following the stories reporting the deal.
Luxury fashion brand Versace according to reports will soon be sold.
French fashion houses including Paris-based Kering PRTP.PA were among those holding talks with the Versace family, the sources said, but considered the price too expensive.
Also weight in on the conversation is Pascal Martin, partner, OC&C Strategy Consultants, who said Versace's new owner is betting on all the obvious levers - open more stores, grow e-commerce, increase the accessory business - to accelerate growth.
A representative for Versace declined to comment on the potential transaction.
London-based Kors past year snapped up shoemaker Jimmy Choo Plc for about $1.2 billion.
Versace reported sales of €686m in 2016.
Versace had planned to float the company on the stock market but put the plans on hold owing to unfavourable conditions.
As spotted by the Bloomberg reporter Kim Bhasin, Donatella Versace's Instagram has been bombarded with comments begging her to call off the deal.
Versace's net profit last year was just under $22.7 million, compared with a net loss of $12 million the previous year. She is artistic director of the fashion house.
The brand has been at its most prominent in years since a hit show last September at Milan Fashion Week.
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