Michael Kors To Buy Versace For Over $2 Billion
Let's see how this plays out.
Mon Sep 24 2018 19:00:00 GMT+0000 (Coordinated Universal Time)
Michael Kors will soon be closing a deal to buy Versace for around $2.35 billion. Tiffany & Co. was also in talks to buy the Italian fashion company but dropped out after the price tag got a little out of hand.
Price wise, Michael Kors and Versace are on opposite ends of the fashion spectrum, with Michael Kors focusing on more affordable items and Versace being known for their luxury (read: expensive as hell) items. This deal will help Michael Kors get a foot in the European fashion game.
Last year Versace made around $823 million, but only roughly $17.5 million of that was profit. In that same span Michael Kors made around $4.7 billion, with $2.8 billion being profit.
The Versace family owns 80% of Versace and the other 20% is owned by private-equity firm Blackstone Group, which plans to sell its ownership as part of the deal. On the day of this news being released Michael Kors stock dropped around 7%. I guess investors aren't too happy with the news.