A change in Italian fashion: Versace's parent company sold in multi-billion deal

Versace’s parent company has announced it’s being bought by the luxury goods group Tapestry.

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In a new deal worth $8.۵ billion (approximately €7.75bn), Capri Holdings is being taken over by Tapestry, whose existing brands include high-end names like Coach and Kate Spade.

Capri Holdings will also be passing over ownership of labels such as Michael Kors and Jimmy Choo.

In a statement from Tapestry's boss Joanne Crevoiserat, the company said the deal "creates a new powerful global luxury house".

The fashion house was founded in ۱۹۷۸ by the late Gianni Versace, pictured here in ۱۹۹۱

AP

Fashion industry analysts are already surmising the buyout will be the foundation for a rival to compete with European fashion giants, like Kering and LVMH.

The France-based industry behemoths own some of the biggest brands in fashion, including Gucci, Saint Laurent and Balenciaga (Kering) and Givenchy, Louis Vuitton and Dior (LVMH).

Versace itself, founded in Milan ۴۵ years ago, has long been seen as a symbol of luxury, Tapestry’s brands are often seen as more accessible for aspirational consumers.

Pieces from the likes of Michael Kors and Kate Spade tend to start around the €100 mark, making them a little more affordable than the thousands of euros high-end luxury brands often charge for clothing and accessories.

A Michael Kors store on Madison Avenue, NYC

Richard Drew/AP

However, Michael Kors is currently suffering a dip, following years of underperformance. It’s a risk to take on, industry experts say, but Tapestry has a solid history of turning around suffering brands. Among other triumphs, it managed to invigorate the struggling Kate Spade when it took the label over in ۲۰۱۷.

As well as the challenge of trying to turn around the fortune of Michael Kors, Tapestry is also faced with a difficult time for the industry. Inflation has shot up in many countries, squeezing consumer spending and hitting hard the pockets of aspirational shoppers.

The Tapestry deal is set to go ahead next year and is the second time in five years that Versace has been sold.

Michael Kors acquired the Italian label in 2018, paying over €1.۸ billion for the company, owned by the Versace family for decades.

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Along with Jimmy Choo, which it had purchased in 2017, Michael Kors set up Capri Holdings as an umbrella company - perhaps proving that fashion can truly be cyclical.