News broke this week that the rumours Michael Kors has bought out Versace for $2.1 billion are true – and the reactions from the industry are a little controversial.
Written by Jessica Graham
Supporters of the Italian fashion house are outraged, as they fear that the reputation Michael Kors carries does not coincide with the Versace mantra. Kors is an American brand, known for its lower price tags and wider spectrum of consumers, while Versace is known as the epitome of Italian fashion luxury, and is seen frequently on red carpets and celebrities.
However, it was also reported that Donatella is to remain positioned in the creative sector, so some fashion insiders believe that this deal will not change the magic of the Versace brand. It was just a smart business deal.
So, here is how industry insiders have reacted to the newest development in the era of fashion M&A Darwinism…
John Idol, CEO, Michael Kors
If you look at some of the other Italian luxury brands — which will remain nameless — they are doing in the billions of euros today.” So, Versace is terribly underdeveloped and that’s really going to change now that they’ll have the resources of Capri behind them. via Bloomberg News
Jeanne Beker, Canadian fashion journalist and entrepreneur
It’s emblematic where fashion has gone! I don’t even want to say where it’s going anymore… because it is sort of ‘gone’ to me. In my mind, on some levels, Michael Kors’ sensibility and Versace’s sensibility perhaps are worlds apart. One’s very American and one is very European, very Italian, but at the end of the day, if you flashback to what Michael Kors stood for all those years ago; it was all about luxury. Back in the day when he was designing for Celine, Michael always aspired to more. Yes, there was that strong American sportswear aesthetic and the success that he had with that, but – I mean look at what they called the company… Capri Holding! For God’s sake if that doesn’t speak to what he’s after you know and what the big picture dream is all about. There is not enough luster to the brands (with all due respect) with Tapestry… In some ways, it does make perfect sense. It is a real fantasy come true even for Michael as a designer, and as a creative force to have a link so close with Versace. Obviously, it is a creative dream come true I think.
It is fashion having gone the route of business over all else, for me as a romantic from the glory days of fashion, and really what I see as fashion’s golden age… I’m not saying there isn’t great fashion going but it’s really been sucked up by the bands of businesses now. I remember at one point when Versace was looking for a new designer, and I thought Michael Kors may be the perfect designer to go over to Versace and design for Versace, several years back. I always thought that there was something similar to the bravado that Michael Kors and his label has or had – it has been watered down a bit in recent years, sadly but – the bravado that Versace has always had, so it’s not like these houses are coming together and it’s like “what the hell are they thinking?” Versace has such a strong legacy and I do think that the Michael Kors people will be respectful to that. Let’s just hope it doesn’t get watered down, that’s always a big danger. It is such a different time in fashion. The brand has taken precedence over the actual product or any kind of design direction. It is all about building up a brand.
Loretta Chin, Canadian fashion and film stylist
“I think the move is about capitalizing on the association with the luxury market, and there are very few independent luxury brands available to buy. Versace has always about opulence and luxury and Michael Kors has always proffered the image of American chic and jetsetter style at a more attainable price point. To optimize that brand sensibility, what better way for the Kors group to purchase a heritage European luxury brand? Purchasing American brands like Kate Spade or Coach would be lateral move and not have the intended effect of the upwardly mobile movement Kors’ desires.”
Kim Bhasin, Senior reporter at The Huffington Post, and U.S. luxury reporter at Bloomberg
Versace & Michael Kors have created corporate America's most name-dropping powerpoint slide ever: pic.twitter.com/3SyzAurp4k
— Kim Bhasin (@KimBhasin) September 25, 2018
Julie Zerbo, Fashion lawyer and founder of The Fashion Law
“It is my understanding that unlike Tapestry – which as a result of owning Coach, Kate Spade, and Stuart Weiztman, is angling more towards the “accessible luxury” market – Michael Kors is looking to build a more up-market conglomerate, one that could, in theory, rival the likes of LVMH or Kering, which are rivaling energy and pharma giants as two of the most valuable companies on the CAC 40. This is part of an on-going effort by the Michael Kors brand to try to reposition itself less an a mall brand than a more bona fide luxury one, and which has seen the brand attempt to distance itself from discounting. The Jimmy Choo acquisition last year was a similar step in this direction for the Kors conglomerate.
Finally, Kors is a publicly traded company. It needs to keep its stockholders happy. Buzzy high fashion and luxury brands might be better able do to this than Kors, which on its own, has been disappointing due to declines in sales in various quarters.” – via Bay Street Bull
Versace, coming to a mall near you soon … https://t.co/GGEq9dX2Qn
— Julie Zerbo (@ZerboJulie) September 25, 2018