United States fashion group Michael Kors Holdings Ltd has sealed an agreement to take control of Italy's Gianni Versace SpA, three sources familiar with the matter said on Monday, adding that an official announcement would be made this week.
Those iconic $2,000-a-pop Gianni Versace gold-colored jackets once worn only by Hollywood elites, including Michael Jackson, Paul McCartney and Madonna, may soon become more affordable.
Another potential buyer whose name was floating around Milan Fashion Week was jeweler Tiffany & Co.
Versace is of course one of the most recognizable and beloved high-fashion outfits in the world.
Weber, who has a four-decade career working with top retail brands such as Calvin Klein, Phillips Van Heusen and Donna Karen, says the overall luxury sector has limited growth and the only way for it to grow is by greater distribution.
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Donatella Versace is the brand's creative driver. The Versace family is reported to want to continue its involvement. According to the Wall Street Journal, sales for Gucci were up 45 percent in 2017 from 2016. If the company is able to close on the Versace deal and the Coach deal, they will be on par to compete with LVMH.
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.
Kors snapped up shoemaker Jimmy Choo Plc for about 896 million pounds previous year. The Kors brand struggled with a cheap image after it broadly distributed its products to department stores and outlet malls, which heavily discounted its goods.
Shares in Michael Kors fell in early US trade and were down 8.7 percent by 1526 GMT. "We will be actively decreasing our exposure to the wholesale channel by reducing inventory to focus on a higher level of full-price sell-throughs and a lower level of markdowns".
Shares in New York-listed Michael Kors, which previous year acquired show brand Jimmy Choo for £896million, fell by more than 8 per cent on the rumours.
Investors were skeptical: Shares in Michael Kors dropped 7% on Monday.