Sweet holy hell! It’s all been kicking off this week. Fashionistas all over the world have been shedding an opulent tear this week after we lost one of the greats. Specifically, Versace. Before you start, no, Donatella is not dead but the reputation of the brand may well be after the monumental business deal that has just happened. Michael Kors has just purchased the Versace brand for $2.1 billion. I know – the shock has truly hit us all.
Kors wanted to buy the ostentatious fashion house to try and rival the big European luxury conglomerates. They believe they can turn Versace into a multibillion-dollar brand. The news hit about the apparent deal on Tuesday and already it seems the deed has been done. Let’s hammer those nails into the glorious Versace coffin.
I know what you’re thinking; yes, Michael Kors is the guy from Project Runway with the fashion brand that features those bags that the bullies from high school that never grew out of the ‘hoe’ faze owned and the garish watches with the large face (the watch, not Michael, well… Also Michael).
As you can imagine, a lot of fans of the Milan-based fashion house were not impressed by the American invasion of Kors. In fact, a lot of people see this as the death of Versace’s reputation as a prestigious luxury brand.
It’s sacrilege for an American company to take over the Italian luxury fashion house. The average Versace bag costs more than $2,000 where you can nab a Michael Kors handbag at Macy’s for under $100.
Though the news is still shocking, Michael Kors had to follow some rules too in order to obtain Versace.
As part of the deal, Michael Kors Holdings is changing its name to Capri Holdings Ltd. The companies have said that there are changes in the works. The goal is to ‘evolve’ Versace to make it more marketable.
But what are the plans? According to the press release, the goals are as follows:
- Open more stores – They want to open over 100 Versace stores globally to increase the footprint from approximately 200 to 300 stores. For comparison, Prada has 394, Gucci has 529 and Michael Kors has 829.
- Increase the sales of shoes and accessories – The aim is to increase both men’s and women’s accessories and footwear revenues from 35% to a staggering 60%. I don’t know what they will do to become more ‘sellable’ as most people can’t afford the average Versace item. We will have to see where they plan on going with all of this. I imagine it will be along these lines:
- Grow the online shopping – As a part of Capri Holdings, Versace will “accelerate e-commerce and omnichannel development.”
- Double the revenue – The goal is to grow Versace’s revenue to $2 billion. In 2017, Versace says it posted revenue of $808 million.
- “Build on Versace’s luxury runway momentum” – I have no idea what’s going to happen here. All I know is they will never get a moment as iconic as this:
- Enhance Versace’s marketing – According to Lyst, in July, Versace was the 7th hottest fashion brand based on online shoppers’ preferences and behaviours. That brand rose 21 places in since the first quarter of 2018. A big part of this growth will have been the miniseries “The Assassination of Gianni Versace: American Crime Story” which focused on the death of the company’s founder, Gianni Versace.
“Versace needs to grow its direct-to-consumer physical store and online presence. In our view, the online capabilities are behind with respect to social media, fashion, and lifestyle content, shipping speed, and customer engagement; an acquirer could step change innovation online.” – Oliver Chen
But fear not, there are some things that are not supposed to change with the deal
Donatella, her brother Santo and her daughter Allegra currently own 80% of Versace. They will now become shareholders of Capri Holdings.
Johnathan Akeroyd, who has been the CEO of Versace since 2016, will continue to lead Versace’s management team.
Donatella Versace who currently works as the brand’s creative director will “continue to lead the company’s creative vision,” according to a statement from Michael Kors’ CEO John Idol.
“If you look at some of the other Italian luxury brands—which will remain nameless—they are doing in the billions of euros today. So Versace is terribly underdeveloped and that’s really going to change now that they’ll have the resources of Capri behind them.” – John Idol
Well, it’s been a good run Donatella. You’ve given the world some gorgeous clothes, let’s see how long it takes for another large, orange American to destroy something we all loved.
Okay, who am I kidding… Barely any of you even own a piece of Versace – why are you all getting mad?!
I mean, come on. Yes, it’s a shock but who knows, it could be interesting. Let’s be honest, I bet 90% of you reading this article won’t own a single piece of Versace clothing or accessories (maybe even perfume) so don’t worry too much about it.
The deal certainly is a bold move that’s made headlines, but in conclusion:
