I really like Michael Kors as a brand even though sales were not as strong recently. I understand that the Versace brand will help with unlocking a higher luxury market, but sales there were not as impressive either. I’m curious to know what motivated this acquisition. Does anyone have any thoughts or insights? @Michael Kors @Versace
Why Versace? Bad choice of brand. Maybe it was the only available brand?
Budget restriction
Think it’ll just bring down Versace’s value...
I think it will drag down Versace rather than boosting Michael Kors
Michael Kors is the new Coach. It’s basic. For basics. It’s attainable luxury for the masses. This acquisition will bring Versace down versus the other way around.
The luxury market is one where many fashion houses are now huddled under investment umbrellas and MK is obviously looking to diversify and grow their portfolio, also owning Jimmy Choo. Versace adds iconic pop culture status to their holdings and likely offers increased access to distribution points and global market share growth. For Versace, they stand to gain scale via resources and expansion into product categories that are core competencies for MK like accessories which tend to perform at higher margins. At the end of the day the family remains majority stakeholders (I believe) with Donatella still creative director so at least for now, brand integrity is protected. Seems like a smart move if MK can execute the long term strategy.
Thank you for sharing your thoughts! The last time I saw a product by Versace was in Showgirls :-)
I found this quite an interesting acquisition as well. I agree with your observation OP that this acquisition will help elevate Michael Kors to a more luxury level. I've always seen MK being quite basic.