Michael Kors set to snap up Italy's Versace

Versace for sale? Italy's family fashion house rumoured to be bought out

According to multiple reports, affordable luxury brand Michael Kors Holdings is closing in on a deal to snatch up the Italian luxury brand for an estimated $2 billion.

The expected deal, first reported by Italian daily Il Corriere della Sera last week, would see the Versace family sell its 80 per cent stake and United States private equity firm Blackstone the remaining 20 per cent which it acquired in 2014.

Donatella Versace, Gianni's sister and the company's artistic director, has reportedly called a staff meeting on Tuesday.

By Tommaso Ebhardt, Sarah Syed and Robert Williams Handbag maker Michael Kors Holding Ltd.is nearing an agreement to buy Gianni Versace SpA after the iconic Italian fashion house drew interest from several suitors, people familiar with the plans said.

Last year, Versace brought back former top models Carla Bruni, Claudia Schiffer, Naomi Campbell, Cindy Crawford and Helena Christensen to the fashion house's catwalk. Now, it's vying with Coach owner Tapestry to build a US-based multibrand fashion empire along the lines of Paris-based conglomerates LVMH and Kering.

In 2016, Versace poached Alexander McQueen's boss Jonathan Akeroyd to help it smarten up for a stock market listing, although that never materialised.

Givi in turn is half-owned by Allegra Versace Beck, daughter of Donatella and niece of late founder Gianni.

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

However according to Neil Saunders, managing director of consultancy GlobalData Retail, both Versace and the Michael Kors brand still have issues to address to improve their appeal.

Two of the three sources who spoke to Reuters said the company had agreed to pay a large premium for Versace, known for its Medusa head logo.

But word that a deal is close sent Kors shares down nearly 9 per cent to as low as US$66.33 in NY on Monday, the biggest intraday drop since May 30. The company had been working toward an initial public offering, though market conditions haven't allowed it to move ahead.

French luxury group LVMH, led by billionaire Bernard Arnault, took full control of Christian Dior, in a €12bn deal that reunites the fashion house with the perfume and other Dior brands.LVMH, owns Dior perfumes and beauty after a deal in the 1960s to raise capital for the then-struggling brand.

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.

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