Michael Kors agrees to buy Versace for €1.83 billion

Global fashion brand Michael Kors has agreed to buy Italian luxury label Versace for €1.83 billion. (AFP)
Updated 25 September 2018
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Michael Kors agrees to buy Versace for €1.83 billion

MILAN: US fashion group Michael Kors has agreed to buy Versace in a deal valuing the revered designer at $2 billion including debt, the companies said on Tuesday, making it the latest Italian brand to fall into foreign hands.
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 buying British stiletto-heel maker Jimmy Choo for $1.2 billion last year.
Versace, known for its bold and glamorous designs and its Medusa head logo, was one of a clutch of family-owned Italian brands cited as attractive targets at a time when the luxury industry is riding high on strong demand from China.
“We believe that the strength of the Michael Kors and Jimmy Choo brands, and the acquisition of Versace, position us to deliver multiple years of revenue and earnings growth,” John Idol, chairman and CEO of Michael Kors said.
As part of the deal, Michael Kors agreed to buy all of Versace’s outstanding shares for a total enterprise value of €1.83 billion ($2.2 billion), to be funded in cash, debt and shares in Michael Kors Holding Ltd, which will be renamed Capri Holdings Ltd.
US private equity firm Blackstone, which bought 20 percent of Versace back in 2014, will fully exit its investment.
The Versace family, which currently owns 80 percent of the fashion house via a holding company called Givi, will receive €150 million of the purchase price in Capri shares.
“We believe that being part of this group is essential to Versace’s long-term success. My passion has never been stronger,” said Donatella Versace, sister of the company’s late founder, and artistic director and vice president of the Milan-based group.
After the deal, Versace CEO Jonathan Akeroyd will remain at the helm of the company, while Donatella Versace will “continue to lead the company’s creative vision,” Idol added.
The deal is expected to close in the fourth fiscal quarter, subject to regulatory approvals.
Michael Kors said it plans to grow Versace’s global sales to $2 billion globally, boost its retail footprint to 300 stores from around 200 at present and accelerate its e-commerce strategy. It also plans to raise the share of higher-margin accessories and footwear to 60 percent of sales from 35 percent.
Versace does not disclose its financial details, but documents deposited with the Italian chamber of commerce show that last year it posted sales of €668 million and earnings before interest, tax, depreciation and appreciation of €45 million.


Startup of the Week: Coco Sabon’s natural skincare

Coco Sabon. (Supplied)
Updated 21 May 2019
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Startup of the Week: Coco Sabon’s natural skincare

  • Coco Sabon’s customers are mostly Arab women aged between 20 and 40, “though we have many loyal fans that span different age groups and come from all over the world”

RIYADH: The healing and relaxing powers of nature are at the heart of Coco Sabon’s philosophy.
Launched by Dr. Cynthia Mosher — an American living in Riyadh — the skincare firm is committed to sourcing high-quality, natural oriental ingredients that provide the skin with gentle care and nourishment.
“I launched Coco Sabon in November 2015 at Alfaisal University’s first bazaar,” she said.
Mosher, who completed a bachelor of science in natural health sciences, said she hoped to do something more than simply diagnose illnesses and prescribe treatments. She also wanted to have time for other important things and people, so now she is working as an educator, training a new generation of medical students.
She encourages people to make healthy choices when it comes to ingredients they use on their bodies.
“I fell in love with formulating and creating beautiful, natural skincare products. I continued my creative journey while pursuing my medical degree, which deepened my commitment to develop ‘do no harm’ skincare based on natural ingredients,” she said.
“Layered with my admiration of Arabian culture, the rich regional ingredients, and my passion for integrative medicine, I developed a deep sense of holistic self-care that guides my formulations. My love for the fragrances, natural remedies and skincare routines of the Middle East are the heart and soul of Coco Sabon.”
There is a growing demand for Coco Sabon products. “After years of requests from family and friends to make and sell my products, I tested the waters, so to speak. We sold out of everything that day.”
She added: “About six weeks later we were invited to participate at the Gathering in Al-Bujairi in January 2016. We had a crowd of customers nonstop for three days and again sold out of everything. It was a decisive weekend. Coco Sabon was born and we have not looked back since.”
Mosher’s family and friends offered encouragement, but one of her strongest supporters was her best friend, Audrey Wilkinson. She said: “Audrey was my supporter, helper and adviser. She now works with me, formulating and producing our candles, cremes and face care line.”
Coco Sabon’s customers are mostly Arab women aged between 20 and 40, “though we have many loyal fans that span different age groups and come from all over the world.”
The brand offers a wide range of products, including soap, bath bombs, scrubs, cremes, face and body oils, perfumes and candles.
“Everything is produced by hand in small batches here in Riyadh using natural, safe and organic ingredients, sourced locally wherever possible,” Mosher said.
Coco Sabon believes in supporting local businesses and in sourcing the best ingredients possible. The store also designs its packaging and hand packages, labels and wraps each item, selling through an online store (cocosabon.com), Instagram, WhatsApp, and local popup shop events.
Mosher has also started offering workshops on making her products.
“Some might think that to be unwise because I could very well teach a future competitor,” she said. “Well, that’s true for the medical students I teach now. Should I withhold my knowledge for fear of them becoming better doctors and doing better? Of course not. The more knowledge we put out there, the better our society will be. The workshops also help build community.
“I connect with people who are curious, who want to learn how to create and how to make good choices for their health. I welcome workshop students young and older (my youngest so far was just 6 years old), and I encourage them to take what they learn and use it to improve their lives and that of others around them. If they make a business out of doing so, then good for them. We all have something to offer the world,” she said.
Mosher is happy that she created a job she loves. “Sometimes I miss practicing clinical medicine, but I remind myself that I am helping people make healthier choices for their bodies, their minds, their souls and the planet,” she said.
“That’s a special kind of medicine that I believe can help heal the world.”