US handbag and clothing brand Michael Kors is reportedly in advanced talks to acquire Italian fashion house Versace in a deal valued at around $2bn.
Reportedly, Bloomberg reported people familiar with the matter as saying that the deal is expected to be announced as early as this week.
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In addition, private equity firm Blackstone Group, is considering to divest its 20% interest in the Italian fashion brand if the deal materialises, noted a source familiar with the deal.
The details of both deals are not disclosed.
The Versace family owns the remaining 80% majority interest in the company and will continue to serve in executive roles following the deal.
Versace had earlier been working toward an initial public offering, but was prevented by market conditions.
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By GlobalDataGlobalData Retail managing director Neil Saunders said: “That Michael Kors should court Versace is no great surprise. The American company has long desired to transform itself into a house of luxury brands; a process it started with last year’s acquisition of Jimmy Choo.
“Versace comes with a much bigger price tag, almost double the $1.2bn price that Michael Kors paid for Jimmy Choo. However, it would also put a big-hitting brand with true global status into Michael Kors’ stable.”
Last year, Kors acquired London shoemaker Jimmy Choo for a total consideration of $1.2bn to expand its brand into footwear category.
In addition, the fashion company has reported a decline in retail sales under its main brand in America earlier this year. This has since recovered, trading at an increase of 15% for the year through the end of last week.
However, the reports of the deal have sent Kors shares down almost 9% to as low as £66.33 in New York on Monday, the biggest drop since 30 May.
