Michael Kors Set to Purchase Versace *Update* Confirmed!

[Nomar]

Yikes but I couldn't care less about either brand.

 

[Lola701]

What I hope is that this business decision will not have a major impact in the production of the mainline.
One thing is sure, because they have such a tight business, they always have managed to deliver great quality items. Versace mainline is flawlessly made...

If the new owners are clever, they should go extreme luxe. Michael Kors’s Mainline bags are really well made but not original in terms of design...

Versace will be the Vuitton or the Gucci of their group so, they have to go for the extreme luxe!

 

[jeanclaude]

For me this feels like murdering Gianni again...

 

[Benn98]

What I hope is that this business decision will not have a major impact in the production of the mainline.
One thing is sure, because they have such a tight business, they always have managed to deliver great quality items. Versace mainline is flawlessly made...

If the new owners are clever, they should go extreme luxe. Michael Kors’s Mainline bags are really well made but not original in terms of design...

Versace will be the Vuitton or the Gucci of their group so, they have to go for the extreme luxe!

Well I've been reading synergy this and synergy that everywhere, which does not bode well at all! Yes, Versace could do with some input to push their accessories, but does Kors really need more uber luxe brands to give his label a luxurious oomph or legitimacy? You're selling mayonaisse, not hollandaise. There's value in being basic.

I will say that it is remarkable, if not historical?, for an American upstart to step into the conglomerate conversation with such a major acquisition.

 

[Nymphaea]

Why is Kors expanding? Is designing alone not enough anymore? Does he want to become an Arnault or Pinault?

 

[Wintergreen]

Is Carmen Kass gonna open every Versace show and star on every campaign from now on?

One can dream, lol.

 

[GivenchyHomme]

We don't know how Capri will dictate their brands. Hopefully they won't be like LVMH. Just look at Dior, LV, and Givenchy. We don't need a piss poor watered down Versace. That's exactly what would have happened if Bernard Arnault got his hands on Versace. Let's pray that Capri will reignite the creativity of Versace!

 

[Benn98]

Versace Merges Diffusion Lines

The Italian luxury brand will fold Versus into its Versace Jeans label, phasing out Versace Collection.

BY TAMISON O'CONNOR
NOVEMBER 1, 2018 05:30

MILAN, Italy — Hot on the heels of its sale to Michael Kors, Versace is merging two of its contemporary lines, folding Versus into its Versace Jeans label, and phasing out Versace Collection.

Versace Jeans is licensed to Swinger International, a Verona-based group whose portfolio contains Genny and Cavalli Class. Swinger International did not respond to a request for comment.

Donatella Versace will creatively head up the brand, and a refreshed Versace Jeans is expected to debut in November.

“Over the past few months, we have been looking at ways as to how we can simplify our business model and enable us to give a better focus and energy into our brand portfolio,” Versace chief executive Jonathan Akeroyd said in a statement.

The news was first reported by Women’s Wear Daily.

The news comes one month after Michael Kors Holdings — since renamed Capri Holdings — announced it would be buying the Italian fashion house for $2.1 billion. The deal is expected to close in the fourth quarter of 2019. At the time, Capri outlined plans to turn Versace into a brand with $2 billion in annual revenue and 300 stores worldwide by 2023.

The move is part of a wider industry trend of brand consolidation. Over the past few years, a number of luxury brands have been doing away with their diffusion lines, including Armani, Dolce & Gabbana, Burberry and Marc Jacobs, while Victoria Beckham merged her Victoria Beckham Denim line into the Victoria, Victoria Beckham collection.

“The fixed marketing costs to sustain a line are increasing, it only makes sense to consolidate where this is possible,” said Luca Solca, head of luxury goods at Exane BNP Paribas.

In an internet driven world, shoppers have access to more products — at a range of price points — than ever before. Plus, today’s retail landscape is no longer driven by wholesale. The shift towards direct-to-consumer distribution and the rise of e-commerce means a strong brand identity is important for brands looking to cut through the noise and reach their consumers, who can become confused when overwhelmed by a variety of sub-brands.

“In today’s market it is the consumer that directly drives the success of a brand rather than the wholesaler,” said Mario Ortelli, managing partner of luxury advisors Ortelli & Co.

“When you have got too many lines, you have some duplication for sure in your structure from a design point of view and distribution. When you’ve got a unique line, it is also easier to focus the effort of your organisation and your marketing spend.”

Businessoffashion.com

 

[GivenchyHomme]

And we all know how well that ended for Marc Jacobs.

 

[Lola701]

Good step in the right direction. Nobody buys those lines anyway...
I guess they have to have them because of the licensing deal.
In a long term, and at the end of their contract, they should just close those brands forever.

And we all know how well that ended for Marc Jacobs.

Yes but Marc by Marc Jacobs was making more money than the mainline and Marc Jacobs had a strong accessories business under the MJBMJ brand.

Versace Mainline is the money maker. And the brand is selling more clothes than anything else.

 

[reese06]

I think this is a good move although I would have expected Versace Jeans to fold into Versus, not vice versa.

Versace Collection is such an outlet, clearance, closeout brand anyways.

 

[Lola701]

I think this is a good move although I would have expected Versace Jeans to fold into Versus, not vice versa.

Versace Collection is such an outlet, clearance, closeout brand anyways.

It’s a pity that Kane left Versus because they really had the opportunity to turn the brand into a kind of MiuMiu bis.
The brand has lost it luster since Kane and I have to say that Kane’s career post Versus has been a long disappointment.

 

[Benn98]

Michael Kors Turnaround a Work in Progress as Versace and Jimmy Choo Show Gains

BY SAMANTHA MCDONALD

Capri Holdings Ltd.’s “investment year” is here — but flagship label Michael Korscontinues to face obstacles amid a challenging retail environment.

For the first quarter ended June 29, the fashion luxury group posted adjusted profits of $145 million, or earnings of 95 cents per diluted share, besting analysts’ bets of 90 cents a share. However, revenues just missed Wall Street’s estimates of $1.37 billion and climbed 11.9% to $1.35 billion.

Versace — which Capri acquired late last year in a $2 billion deal — flexed its muscle with sales of $207 million and comps that increased double-digits on a constant currency basis. Jimmy Choo’s revenues, on the other hand, declined 8.7% to $158 million, while Michael Kors dropped 4.8% to $981 million.

In a statement, chairman and CEO John D. Idol said, “We are investing in Versace and Jimmy Choo to position these preeminent luxury houses for long-term revenue growth and margin expansion. We are also executing on our strategic initiatives at Michael Kors to return the brand to growth.”

During the group’s call with investors, Idol noted strength in the fashion active footwear category across all banners — particularly through Versace’s Cross Chainer and Jimmy Choo’s Diamond sneakers as well as Michael Kors’ Georgie trainers.

The exec also pointed out Versace and Jimmy Choo’s presence at the 2019 Met Gala in May, calling the former “the most engaged brand across all social media channels” during the fashion event.

“With the power of Versace and Jimmy Choo, and the strength of Michael Kors, we remain confident that our three iconic, founder-led fashion brands position Capri Holdings to grow revenue to $8 billion over time and deliver multiple years of earnings growth,” Idol added.

For fiscal 2020, Capri still expects diluted earnings per share of $4.95 — taking into account the strengthening U.S. dollar and the impact of President Donald Trump’s 10% tariff on $300 billion worth of Chinese imports, which include shoes and ready-to-wear. It lowered its full-year revenues from $6 billion to $5.8 billion, while forecasting sales of about $650 million at Jimmy Choo and $900 million at Versace.

Footwear News

 

[Lola701]

^^
If you’re considering Versace as a preeminent luxury brand, can you shut down the pathetic Versace Jeans Couture ASAP?

 

[Deleted member 7575]

I love how in the past she made such a big deal about holding out for the right partners to sell to and needing to protect Gianni's legacy and be faithful to her brother and then she goes and sells the damn thing to Michael Kors.

She was just holding out for a big enough offer!!! 2 Billion! Well played.

 

[Deleted member 7575]

I'm all in for this. Get that cash Donatella.
I don't hate Kors like so many here do.
I think this is a good fit, and It's great to see an American snapping up European luxury brands.

WORD

 

[Lola701]

I love how in the past she made such a big deal about holding out for the right partners to sell to and needing to protect Gianni's legacy and be faithful to her brother and then she goes and sells the damn thing to Michael Kors.

She was just holding out for a big enough offer!!! 2 Billion! Well played.

So true!
We all know Versace ain’t worth 2 billion.
It’s like when LVMH bought Fendi for 1 billion in 2001. The family and Karl made a lot of money (he owned the logo) but the brand took almost a decade to reach the 1B status.

I don’t think Versace can reach 1B of sales...Not with those collections.

 

[bc collector]

Donatella did the right thing, she's much smarter than her looks give away. Who else was she supposed to sell to? There certainly wasn't a queue of investors outside her door...
I think it's irrelevant at this point how much money the brand makes, we all know the 1B target usually is reached at the cost of compromising on integrity or quality or both. I think the real issue here is making sure the brand has a future with a suitable creative direction.

 

[Deleted member 7575]

Donatella did the right thing, she's much smarter than her looks give away. Who else was she supposed to sell to? There certainly wasn't a queue of investors outside her door...
I think it's irrelevant at this point how much money the brand makes, we all know the 1B target usually is reached at the cost of compromising on integrity or quality or both. I think the real issue here is making sure the brand has a future with a suitable creative direction.

I believe LVMH was about to purchase it but then Capri Holdings swooped in at the last minute and made their 2 billion dollar offer. Of course I don't blame her for taking the money... I would have! But as far as creative managers go, LVMH has a well proven track record of knowing how to maintain prestige, ensure creative integrity AND maximize profits. Capri still feels beholden to a very old school, very American model of watering down the brand through down market descending tiers of generic, low-integrity product. Not an ideal group of people to take over your dead brother's legacy. But maybe they're smarter than I think. For 2 Billion USD, I sure hope so.

 

[Benn98]

Quite amazed that they're performing so well under the circumstances, but then I hope it makes up for the slump which they will have experienced during the China debacle. Would Kors have pulled their socks up in the process? Who knows. Kors is in dire need of a creative overhaul. And even though Versace is too IMO, I don't imagine they will change anything now.