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)


Iraqis turn to budding ecotourism to save marshes

Updated 22 May 2019
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Iraqis turn to budding ecotourism to save marshes

  • The Mesopotamian marshes are a rare aquatic ecosystem in a country nearly half of which is covered in cracked desert
  • Legend has it, they were home to the biblical Garden of Eden

CHIBAYISH, Iraq: Thirty years after Saddam Hussein starved them of water, Iraq’s southern marshes are blossoming once more thanks to a wave of ecotourists picnicking and paddling down their replenished river bends.
A one-room home made of elaborately woven palm reeds floats on the river surface. Near it, a soft plume of smoke curls up from a firepit where carp is being grilled, Iraqi-style.
A few canoes drift by, carrying couples and groups of friends singing to the beat of drums.
“I didn’t think I would find somewhere so beautiful, and such a body of water in Iraq,” said Habib Al-Jurani.
He left Iraq in 1990 for the United States, and was back in his ancestral homeland for a family visit.
“Most people don’t know what Iraq is really like — they think it’s the world’s most dangerous place, with nothing but killings and terrorism,” he said.
Looking around the lush marshes, declared in 2016 to be Iraq’s fifth UNESCO World Heritage site, Jurani added: “There are some mesmerizing places.”
Straddling Iraq’s famous Tigris and Euphrates rivers, the Mesopotamian marshes are a rare aquatic ecosystem in a country nearly half of which is covered in cracked desert.
Legend has it, they were home to the biblical Garden of Eden.
But they were also a haven for political opposition to dictator Saddam Hussein, who cut off water to the site in retaliation for the south’s uprising against him in 1991.
Around 90 percent of the once-expansive marshes were drained, and the area’s 250,000 residents dwindled down to just 30,000.
In the ensuing years, severe droughts and decreased water flows from the twin rivers’ source countries — Turkey and Iran — shrunk the marshes’ surface from some 15,000 square kilometers to less than half that.
It all culminated with a particularly dry winter last year that left the “ahwar,” as they are known in Arabic, painfully parched.
But heavier rains this year have filled more than 80 percent of the marshes’ surface area, according to the United Nations, compared to just 27 percent last year.
That has resurrected the ancient lifestyle that dominated this area for more than 5,000 years.
“The water returned, and with it normal life,” said 35-year-old Mehdi Al-Mayali, who raises water buffalo and sells their milk, used to make rich cream served at Iraqi breakfasts.
Wildlife including the vulnerable smooth-coated otter, Euphrates softshell turtles, and Basra reed warbler have returned to the marshlands — along with the pickiest of all species: tourists.
“Ecotourism has revived the ‘ahwar’. There are Iraqis from different provinces and some foreigners,” Mayali said.
A day in the marshes typically involves hiring a resident to paddle a large reed raft down the river for around $25 — not a cheap fare for Iraq.
Then, lunch in a “mudhif” or guesthouse, also run by locals.
“Ecotourism is an important source of revenue for those native to the marshes,” said Jassim Assadi, who heads Nature Iraq.
The environmental activist group has long advocated for the marshes to be better protected and for authorities to develop a long-term ecotourism plan for the area.
“It’s a much more sustainable activity than the hydrocarbon and petroleum industry,” said Assadi, referring to the dominant industry that provides Iraq with about 90 percent of state revenues.
The numbers have steadily gone up in recent years, according to Assaad Al-Qarghouli, tourism chief in Iraq’s southern province of Dhi Qar.
“We had 10,000 tourists in 2016, then 12,000 in 2017 and 18,000 in 2018,” he told AFP.
But there is virtually no infrastructure to accommodate them.
“There are no tourist centers or hotels, because the state budget was sucked up by war the last few years,” Qarghouli told AFP.
Indeed, the Daesh group overran swathes of Iraq in 2014, prompting the government to direct its full attention — and the bulk of its resources — to fighting it back.
Iraq’s government declared victory in late 2017 and has slowly begun reallocating resources to infrastructure projects.
Qarghouli said the marshes should be a priority, and called on the government to build “a hotel complex and touristic eco-village inside the marshes.”
Peak season for tourists is between September and April, avoiding the summer months of Iraq when temperatures can reach a stifling 50 degrees Celsius (122 degrees Fahrenheit).
But without a long-term government plan, residents worry that water levels will be hostage to fluctuating yearly rainfalls and shortages caused by Iranian and Turkish dams.
These dynamics have already damaged the marshes’ fragile ecosystem, with high levels of salination last year killing fish and forcing other wildlife to migrate.
Jurani, the returning expatriate, has an idea of the solution.
“Adventurers and nature-lovers,” he said, hopefully.