Michael Kors Nears Deal for Versace for More Than 2 Billion Euros

Michael Kors Nears Deal for Versace for More Than 2 Billion Euros

But word that a deal is close sent Kors shares down nearly 9 per cent to as low as US$66.33 in NY on Monday, the biggest intraday drop since May 30. "I wonder. The plan seems ambitious". Versace declined to comment. Now, it's vying with Coach owner Tapestry Inc.to build a US -based multibrand fashion empire along the lines of Paris-based conglomerates LVMH and Kering SA.

"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.

Artistic Director of the fashion giant and Vice President of the company said to be worth about $2 billion, Donatella Versace, has reportedly called a meeting in Milan for Tuesday.

Versace is 80% controlled by the late designer's family, with private equity firm Blackstone holding a 20% stake.

After investing in Versace at a high multiple, Blackstone found the fashion group's performance disappointing and not sufficient to justify a market listing, said one of the sources, who is close to the family.

"They gradually persuaded the family to look into a possible sale and introduced them to a series of buyers, including Michael Kors", the person added. "They needed a buyer who could make heavy investments". While talks are advanced, no final agreements have been reached, the people said.

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"They didn't feel the need to invest so much money into another Italian fashion brand".

Versace reported sales of €686m in 2016.

She holds a 20 per cent stake in the company, her daughter Allegra has a 50 per cent stake, while Santo, Donatella's brother, holds the remaining 30 per cent.

Donatella Versace has run the label since her brother was murdered. Both companies have declined to comment on the matter for now, however.

Versace does not disclose its financial details, but documents deposited with the Italian chamber of commerce show that a year ago it posted sales of 668 million euros (US$786 million) and earnings before interest, tax, depreciation and appreciation (EBITDA) of 44.6 million euros.

Versace had revenue of 686 million euros and returned to profit in 2017, according to figures provided by the company.

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