Multiple media outlets have confirmed U.S. based Michael Kors will purchase Italian luxury label Versace. According to Reuters, the announcement will be made within the next week. The cost of the deal has been estimated to be around two billion dollars.
Michael Kors will add the label to a portfolio that already includes British shoe company Jimmy Choo, which it purchased for $1.2 billion last year.
Versace was founded in 1978 by Gianna Versace, who was murdered in 1997. After his death, his sister, Donatella Versace, who was vice-president, took over his role as creative director and his older brother Santo Versace became CEO.
Prior to the Kors deal, there have been rumors Versace considering a public listing, after U.S. investment firm Blackstone purchased 20 percent of the company in 2014. According to a source, Blackstone was disappointed with the return on its investment and didn’t view the label as a good candidate for an IPO.
“They gradually persuaded the family to look into a possible sale and introduced them to a series of buyers, including Michael Kors,” the source told Reuters. “Blackstone wasn’t going to put any more money into it. They needed a buyer who could make heavy investments.”
As part of the deal, Blackstone will exit entirely while the Versace family will maintain a role. Donatella, Versace’s who is now the label’s artistic director and vice president, is slated to meet with staff on Septembr 25th.