Michael Kors snaps up Italy’s Versace — sources

In this Friday, Sept. 21, 2018 file photo, Donatella Versace comes on the catwalk at the end of Versace's women's 2019 Spring-Summer collection, unveiled during the Fashion Week in Milan, Italy. An Italian newspaper report says that the Versace group is on the verge of announcing its sale to Michael Kors. (AP)
Updated 24 September 2018
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Michael Kors snaps up Italy’s Versace — sources

  • Donatella Versace called staff meeting for Tuesday - source
  • Family to retain a role, Blackstone will fully exit - sources

LONDON: US fashion group Michael Kors Holdings Ltd. has agreed to take control of Italy’s Versace in a deal that could value the company at $2 billion, sources familiar with the matter said on Monday.
The deal comes as budding luxury conglomerates, including Michael Kors’ US rival Tapestry, owner of Coach and Kate Spade, are trying to make in-roads into an industry still dominated by major European players, including Louis Vuitton owner LVMH.
Michael Kors, whose namesake label is best known for its leather handbags, has made no secret of its ambition to grow its portfolio of high-end brands after swooping on British stiletto-heel maker Jimmy Choo for $1.2 billion last year.
Versace is one of a clutch of family-owned, independent Italian brands that have regularly been cited as attractive targets at a time when the luxury industry is riding high on strong demand from Chinese consumers.
But not all brands have benefited equally, with some struggling to refresh their image or products to capture a younger audience, and some fashion groups are looking to diversify with more labels to face such challenges.
The deal gives Michael Kors a mega-brand and red carpet favorite that is among the most recognizable and followed fashion labels in the world. 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.
Michael Kors could not immediately be reached for comment. Versace declined to comment.
Donatella Versace, sister of late founder Gianni who doubles as artistic director and vice president of the Milan-based group, has called a staff meeting for Tuesday, according to a person who was briefed by a company employee.
The Italian fashion icon has been considering a market listing after US private equity group Blackstone bought a 20 percent stake back in 2014 to fund overseas expansion, although Chief Executive Jonathan Akeroyd told Reuters earlier this year there was no rush for a market debut.
After investing in Versace at a high multiple, Blackstone found the fashion group’s performance disappointing and not sufficient to justify a market listing, said one of the sources, who is close to the family.
“They gradually persuaded the family to look into a possible sale and introduced them to a series of buyers, including Michael Kors,” the person added.
“Blackstone wasn’t going to put any more money into it. They needed a buyer who could make heavy investments.”
“OVERPRICED“
French fashion houses including Paris-based Kering were among those holding talks with the Versace family, the sources said, but considered the price too expensive.
“They didn’t feel the need to invest so much money into another Italian fashion brand. It was overpriced,” the source said.
Kering declined to comment.
As part of the deal, Blackstone will fully exit the Italian company, while the Versace family, which owns the rest of the fashion house, will keep a role, the sources said.
Blackstone declined to comment.
An official announcement is expected this week, the sources said.
Versace does not disclose its financial details, but documents deposited with the Italian chamber of commerce show the Milan-based group last year posted sales of 668 million euros ($786 million) and earnings before interest, tax, depreciation and appreciation (EBITDA) of 44.6 million euros.
The group last year returned to a net profit of just under 15 million euros compared with a net loss of 7.9 million euros the previous year. ($1 = 0.8499 euros)


The high life: Ashley Graham shows off Etihad Airways suite

Ashley Graham at an event earlier this year. (AFP)
Updated 48 min 22 sec ago
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The high life: Ashley Graham shows off Etihad Airways suite

DUBAI: US celebrity model Ashley Graham was given VIP treatment on an Etihad Airways flight this week after she wrapped up hosting the Miss Universe 2018 pageant and jetted off on her winter holiday.

The model took to Instagram on Tuesday morning to share a video taken on her flight, saying “I’m in an airplane, in the air, headed to Dubai,” although the star could have meant Abu Dhabi as that’s where the flagship carrier of the UAE is based.

Graham flew in the residence suite, which features an on-board living room, separate bedroom and shower room.

The living room on the A380 aircraft boasts a leather double-seat sofa and two dining tables, along with a 32-inch flat screen TV. The hallway leads to a bedroom with a double bed and the shower room features a full-height shower and vanity unit. And if that isn’t enough, discerning travelers are also taken care of by a private butler, who appears in Graham’s video.

Graham posted the clip after touching down in a mystery holiday location, complete with blue skies and palm trees, which she posted about on her Instagram Stories.

It wasn’t her first time in the suite, however, as a few days earlier she took to Instagram to post a photo in which she can be seen in a bedroom aboard an Etihad Airways plane.

“You’re closer to your dreams when you sleep in the sky,” she captioned the photo.

The model is taking a well-deserved break after co-hosting the Miss Universe pageant in Bangkok, Thailand. The competition, which wrapped up on Dec. 16, culminated in a glittering ceremony in which Miss Philippines was crowned as the winner.

Graham gave Miss Philippines Catriona Gray a run for her money in the fashion department, however, wearing a sequence of gorgeous gowns during the show’s closing ceremony. From a figure-hugging, high-necked white dress to an emerald green gown with a peek-a-boo cutout, Graham was as glamorous as the contestants themselves.

As for her trip with Etihad Airways, the model joins an A-list set of stars who have flown with the airline in recent months, including Pakistani-Lithuanian-Australian Victoria’s Secret beauty Shanina Shaik, who starred in a campaign video for the airline in October.