Like Jimmy Choo, Versace is not becoming Michael Kors — Here’s how
You’re probably not totally clear on this whole “Michael Kors now owns Versace” thing. Yes, the most successful all-American brand in the current market is now the proud owner of one of the most preeminent names in Italian fashion. It’s mind-bending, truly. But Versace is still Versace. Let me explain.
After rumors of the acquisition, Michael Kors Holdings officially confirmed its purchase of Versace for $2.12 billion. In its acquisition of the brand, Michael Kors Holdings will now officially be named Capri Holdings. As BAZAAR.com reported earlier today, “The Versace family will become shareholders of Capri Holdings Limited, with Donatella keeping her role as creative director of the fashion house. Capri Holdings, formerly Michael Kors Holdings, now has three major fashion houses under its portfolio: Michael Kors Collection, Jimmy Choo, and Versace.
Michael Kors Holdings acquired Jimmy Choo last year, setting itself apart from other fashion conglomerates that tend to grow in scale and revenue strictly via licenses, diffusion lines, and the acquisition of more mass-market labels. John D. Idol, CEO of Michael Kors Holdings Limited, said in a release: “The acquisition of Versace is an important milestone for our group…We believe that the strength of the Michael Kors and Jimmy Choo brands, and the acquisition of Versace, position us to deliver multiple years of revenue and earnings growth.”
Here’s where the confusion lies. Fans of the iconic Italian brand, which became beloved stateside when Gianni Versace moved into the Versace Mansion and changed the face of American style in the late ’80s and ’90s, are terrified of what’s to come due to Kors’ influence on the brand. Michael Kors is known for easy, breezy, American style–not the sexy, risk-taking, ultra-luxe Italian allure upon which Versace is based. Furthermore, Kors’ success is based upon his licensing and diffusion brands, like Michael Michael Kors, as well as his fragrance, timepieces, and accessories partnerships. It seems fans are worried this kind of market saturation could be next for Versace, which currenly only has one sister line, Versus Versace, to its name.
But similar to Jimmy Choo’s agreement with Kors Holdings, Donatella Versace will continue to remain at the helm of her namesake brand, leading the brand’s creative vision. Said Versace of the news, “This is a very exciting moment for Versace. It has been more than 20 years since I took over the company along with my brother Santo and daughter Allegra. 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, Allegra and I recognize that this next step will allow Versace to reach its full potential.”
Understandably, this means that scaling the Versace name into new avenues of revenue is a possibility–but that likely won’t include mass-retailers in the way Kors has expanded his ever-growing empire—at least not immediately. It seems that Kors, now Capri Holdings Limited, is eager to expand predominantly into the luxury space, and much will be revealed when details of the acquisition are finalized and released.
While Donatella’s loyal fanbase might not be as welcome to change, she certainly seems to be excited for what the future may bring under Idol and the Capri’s collaboration and leadership. “We believe that being part of this group is essential to Versace’s long-term success,” Donatella said. “My passion has never been stronger. This is the perfect time for our company, which puts creativity and innovation at the core of all of its actions, to grow.”