Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

MarketScreener Homepage  >  Equities  >  Nyse  >  Blackstone Group LP    BX

My previous session
Most popular
News SummaryMost relevantAll newsOfficial PublicationsSector newsTweets

Michael Kors set to snap up Italy's Versace: sources

share with twitter share with LinkedIn share with facebook
share via e-mail
09/24/2018 | 06:12pm CEST
FILE PHOTO: Designer Michael Kors waves after the showing of his Spring/Summer 2019 collection during New York Fashion Week in New York

LONDON (Reuters) - U.S. fashion group Michael Kors has agreed to take control of Versace in a deal that could value one of Italy's most prized designers at $2 billion, sources familiar with the matter said on Monday.

Budding luxury conglomerates, including Michael Kors' U.S. rival Tapestry, owner of Coach and Kate Spade, are trying to make in-roads into an industry still dominated by European players such as Louis Vuitton owner LVMH.

Michael Kors, whose namesake label is best known for its leather handbags, has made no secret of its ambition to grow its portfolio of high-end brands after buying British stiletto-heel maker Jimmy Choo for $1.2 billion last year.

Versace, known for its bold and glamorous designs and its Medusa head logo, is one of a clutch of family-owned Italian brands cited as attractive targets at a time when the luxury industry is riding high on strong demand from China.

But not all brands have benefited equally, with some struggling to refresh their image or products to capture a younger audience, and some fashion groups are looking to diversify with more labels to face such challenges.

"Bringing brands like these back to center stage is not as easy as it looks, though," said Luca Solca, an analyst at Exane BNP Paribas. "Would Michael Kors have what it takes to succeed in this? I wonder. The plan seems ambitious."

Shares in Michael Kors fell in early U.S. trade and were down 8.7 percent by 1526 GMT.

The move is in line with the U.S. brand's ambition to aggregate various luxury brands - including fashion, shoes and accessories - under one larger group.

The deal - which is expected to be announced imminently - will give Michael Kors a mega-brand and red carpet favorite that is among the most recognizable and followed fashion labels in the world.

Two of the three sources who spoke to Reuters said the company had agreed to pay a large premium for Versace.

Michael Kors could not be reached for comment. Versace declined to comment.

Donatella Versace, sister of late founder Gianni who doubles as artistic director and vice-president of the Milan-based group, has called a staff meeting for Tuesday, according to a person who was briefed by a company employee.

The Italian fashion icon has been considering a market listing after U.S. private equity group Blackstone bought a 20 percent stake in 2014 to fund overseas expansion, although Chief Executive Jonathan Akeroyd told Reuters earlier this year there was no rush for an IPO.

After investing in Versace at a high multiple, Blackstone found its performance insufficient to justify a market listing, said one of the sources, who is close to the family.

"They gradually persuaded the family to look into a possible sale and introduced them to a series of buyers, including Michael Kors," the person added.

"Blackstone wasn't going to put any more money into it. They needed a buyer who could make heavy investments."


French fashion houses including Paris-based Kering were among those holding talks with the Versace family, the sources said, but considered the price too expensive.

"They didn't feel the need to invest so much money into another Italian fashion brand. It was overpriced," the source said.

Kering declined to comment.

As part of the deal, Blackstone will fully exit Versace, while the family, which owns the rest of the fashion house via a holding company called Givi, will keep a role, the sources said.

Givi in turn is half-owned by Allegra Versace Beck, daughter of Donatella and niece of late founder Gianni. Donatella herself owns 30 percent of the holding, with the remainder in the hands of her brother Santo.

Blackstone, whose stake acquisition valued Versace at $1.4 billion in 2014, declined to comment.

Versace does not disclose its financial details, but documents deposited with the Italian chamber of commerce show that last year it posted sales of 668 million euros ($786 million) and earnings before interest, tax, depreciation and appreciation (EBITDA) of 44.6 million euros.

Since Akeroyd's appointment in 2016, Versace has been working on streamlining its management structure, cutting costs and pushing to increase sales online.

Last year it returned to a net profit of just under 15 million euros compared with a net loss of 7.9 million euros the previous year.

($1 = 0.8499 euros)

(Additional reporting by Claudia Cristoferi, Giulia Segreti and Elisa Anzolin in Milan and Sarah White in Paris, writing by Agnieszka Flak; editing by Louise Heavens, Kirsten Donovan and Alexander Smith)

By Pamela Barbaglia

Stocks mentioned in the article
ChangeLast1st jan.
BLACKSTONE GROUP LP 0.86% 36 Delayed Quote.9.78%
KERING -2.32% 381.9 Real-time Quote.-5.62%
LVMH MOËT HENNESSY VUITTON SE -0.78% 264.25 Real-time Quote.6.13%
MICHAEL KORS HOLDINGS -1.81% 64.05 Delayed Quote.-0.78%
TAPESTRY INC -1.73% 44.47 Delayed Quote.-2.65%
share with twitter share with LinkedIn share with facebook
share via e-mail
10/16Attendees at Veterans Initiative Summit - Hosted by Apollo, Blackstone, KKR, ..
10/15BLACKSTONE LP : acquires the NEC Group
10/15BLACKSTONE LP : Australia's Investa Office Fund gives Blackstone four days to ma..
10/11BLACKSTONE LP : close to 800 million pound deal to buy British live events busin..
10/11LEGACY RESERVES INC : . Announces Board Resignation and Appointment
10/11EXCLUSIVE : Mitek rebuffs Elliott-backed ASG's takeover approach - sources
10/10GRIDLIANCE : Closes on $65 Million Revolving Credit Facility
10/10BLACKSTONE LP : launches new MENA energy firm
10/08BLACKSTONE LP : Announces Third Quarter 2018 Investor Call
10/08BLACKSTONE LP : Launches New MENA Focused Energy Development Company – Zar..
More news
News from SeekingAlpha
10/16REPORT : Trump ally to bid on Tribune Media 
10/15Two more top finance execs pull out of Saudi conference 
10/15DowDuPont Is Cheap - Cramer's Lightning Round (10/12/18) 
10/13BELIEVE IT OR NOT : This Highest-Rated Qualified Dividend Preferred Stock Is One.. 
10/10Private-equity leads financials lower; some REITs see buying 
Financials ($)
Sales 2018 7 278 M
EBIT 2018 3 983 M
Net income 2018 -
Debt 2018 -
Yield 2018 6,29%
P/E ratio 2018 -
P/E ratio 2019 10,19
Capi. / Sales 2018 5,76x
Capi. / Sales 2019 5,54x
Capitalization 41 938 M
Duration : Period :
Blackstone Group LP Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends BLACKSTONE GROUP LP
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 44,4 $
Spread / Average Target 26%
EPS Revisions
Stephen Allen Schwarzman Chairman & Chief Executive Officer
Jonathan D. Gray President, Chief Operating Officer & Director
Kathleen Skero Finance Director & Principal Accounting Officer
Michael S. Chae Chief Financial Officer
Jay A. Leek Chief Information Security Officer
Sector and Competitors
1st jan.Capitalization (M$)
T. ROWE PRICE GROUP-4.06%24 370
KKR & CO INC17.85%20 299
LEGAL & GENERAL-10.35%19 198
AMUNDI-15.98%13 852