Michael Kors Holdings Limited global fashion luxury group completed today the acquisition of Versace for a total consideration of €1.83 Bn (approximately $2.12 Bn on the date of announcement). The US fashion holding also unveiled that they will change their name into Capri Holdings Limited. Therefore, beginning on January 2nd, 2019, its New York Stock Exchange ticker symbol will be CPRI, instead of KORS.
John D. Idol, Chairman and Chief Executive Officer of Capri Holdings said, “With the acquisition of Versace, we have now created one of the leading global fashion luxury groups in the world. The new name for our group, Capri Holdings, is inspired by the fabled island which has
long been recognized as an iconic, glamorous and luxury destination. The island’s spectacular three rock formation, formed over 200 million years ago, is symbolic of the timeless heritage and strong foundation that is at the core of each of the three founder-led brands.”
Idol continued, “Versace has long been recognized as one of the world’s leading fashion luxury houses, and is synonymous with Italian glamour and style. We are thrilled that the house of Versace is now part of the Capri Holdings family of luxury brands. We look forward to working with Chief Creative Officer Donatella Versace, Chief Executive Officer Jonathan Akeroyd, and their incredibly talented team to continue to drive Versace’s growth and success globally.”
Leaving aside all what the Chairman of Capri Holdings underscores, the purchase of Versace opens the opportunity to help grow the group’s revenues to $8 Bn in the long-term, through the increase of Versace revenues to $2Bn, those of Jimmy Choo to $1Bn, and the revenues of Michael Kors brand to $5Bn.
The transaction opens as well a chance to geographically diversify sales increasing exposure to growing Asia region to the 11% of total revenues of Capri Holdings. the company expects reducing the total share of the Americas region from a 66% to the 57% and rise that of Europe from the 23% to the 24% of total earnings.
An strategical purchase for Capri Holdings and for Versace
The acquisition of Versace is expected to bring not only benefits in terms of revenues and geographical diversification of earnings for Capri Holdings.
The range of advantages to be derived from the transaction for Capri Holdings includes: Expanding global group to include three iconic founder-led brands defined by fashion luxury products with a reputation for world-class design and innovation; and the poterntial to create long-term operational synergies.
The sale to Capri Holdings is framed into Versace’s strategic plan for the long-term growth of the Italian brand including the folloing drivers for action:Growing Versace to $2 in reven Bn in revenues globally; buildiing on Versace’s luxury runway momentum; enhancing Versace’s powerful and iconic marketing; increasing global retail footprint from approximately 200 to 300 stores; cccelerating e-commerce and omni-channel development; and expanding men’s and women’s accessories and footwear from 35% to 60% of the total revenues of the brand.
The Versace family become Capri Holdings shareholders
The cash portion of Versace purchase price was funded by a combination of cash on hand, drawings under its revolving credit facility, and bank term loans.
Concurrently with the closing, the Versace family reinvested an aggregate of Euro 150 million of the cash received for their interests in Versace in exchange for 2,395,170 ordinary shares of Capri Holdings.
“This is a very exciting moment for Versace,” said Donatella 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. We are all very excited to join a group led by John Idol, whom I have always admired as a visionary as well as a strong and passionate leader. We believe that being part of this group is essential to Versace’s long-term success. 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.”
Donatella added, “Santo, Allegra and I will become shareholders in Capri Holdings Limited. This demonstrates our belief in the long-term success of Versace and commitment to this new global fashion luxury group.”
“Versace’s management team will continue to be led by Chief Executive Officer, Jonathan Akeroyd, who has been an instrumental partner to Donatella in driving growth and success for Versace worldwide,” added John D. Idol. “He and Donatella have assembled strong senior management and design teams that will continue to lead Versace into its next chapter. We are extremely fortunate to be able to acquire such an extraordinary brand with an incredibly talented team.”
Jonathan Akeroyd, Chief Executive Officer of Versace, said, “Since I joined Versace over two years ago, our focus has been on leveraging the company’s heritage and strong brand recognition worldwide, which has allowed us to experience significant growth in all regions. Donatella’s unmatched vision has led to the continued and growing success of our brand. I am thrilled to be joining Capri Holdings Limited, which will be instrumental in accelerating our growth globally.”
Image over the headline.- Versace (Photo: Business Wire)
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