Michael Kors is buying Versace for $2 billion

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Donatella Versace: A fashion icon ft. Lady Gaga

It is official: Michael Kors is shopping for Versace.

Michael Kors (KORS) gained a foothold on this planet of elite European style on Tuesday by hanging a €1.eight billion ($2.1 billion) deal for the storied Italian model.

“The acquisition of Versace is a vital milestone for our group,” John Idol, chairman and CEO of Michael Kors, mentioned in a press release.

Following the deal, Michael Kors will change its company identify to Capri Holdings, in what it described as a nod to the “iconic, glamorous and luxurious vacation spot.”

Michael Kors mentioned it plans to develop Versace’s gross sales to $2 billion yearly, open extra shops, enhance the model’s e-commerce companies and broaden its equipment and footwear companies.

The US firm mentioned that Donatella Versace, sister of the style home’s late founder Gianni Versace, would “proceed to guide the corporate’s artistic imaginative and prescient.”

“My ardour has by no means been stronger,” she mentioned in a press release. “That is the proper time for our firm, which places creativity and innovation on the core of all of its actions, to develop.”

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Versace government Jonathan Akeroyd, designer Donatella Versace and Michael Kors CEO John Idol.

The acquisition might assist Michael Kors compete towards rival style teams like Louis Vuitton proprietor LVMH (LVMHF) and Tapestry (TPR), the guardian of Coach and Kate Spade.

Final 12 months, Michael Kors purchased London-based shoemaker Jimmy Choo for $1.2 billion.

Shares in Michael Kors dropped 2% in premarket commerce. The inventory plummeted eight% on Monday following experiences that the Versace deal was imminent.

CNNMoney (New York) First printed September 25, 2018: 7:25 AM ET

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