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Michael Kors may be about to take over Versace.
The American manufacturer of handbags is about to buy Versace in an agreement that values the Italian fashion house at about $ 2 billion, according to Bloomberg. The agreement could be announced as early as this week.
Versace declined to comment. Michael Kors and private equity firm Blackstone, which owns 20% of Versace, did not immediately respond to a request for comment.
The Versace family, which owns the remaining 80% of the brand, will continue to play a role in the company, according to Bloomberg.
Michael Kors sought to strengthen his group of luxury retailers against rivals such as Louis Vuitton's owner LVMH (LVMHF) and Tapestry, Coach's parent and Kate Spade. Last year, Michael Kors bought the luxury shoe brand Jimmy Choo for $ 1.2 billion.
Investors were skeptical: Michael Kors shares fell 7% on Monday.
Neil Saunders, Managing Director of GlobalData Retail Consulting, said the purchase of Versace would add a "big brand with true global status to Michael Kors' stable." The 40-year-old fashion house returned in 2017 with a turnover of nearly $ 800 million.
Saunders said Michael Kors should work to mitigate "some of the most important elements" of the Versace brand in order to appeal to modern consumers. But the deal would help Michael Kors compete with larger competitors.
"While it is true that the enlarged group could realize savings on core costs, we do not think that the addition of a brand such as Versace will help boost the Michael Kors brand," he said. said Mr. Saunders.
"It's more of a game to give the group a more complete and defensible proposal that has a number of brands that can boost performance in different market segments," he added.
CNNMoney (New York) First published on September 24, 2018: 10:49 ET
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