The deal, which comes just 14 months after the handbag designer snapped up luxury shoe brand Jimmy Choo for $1.35 billion, will make Kors a contender among industry giants such as French conglomerate Kering.
Michael Kors remains the chief creative director at Kors, but the expanding company will be renamed Capri Holdings Ltd., with $8 billion in projected annual sales.
Versace will be a key engine of growth, executives said in a conference call Tuesday.
Versace was founded by Gianni Versace in 1978, and soon became an icon of Italian fashion, with its Medusa logo spreading across the globe.
Donatella Versace has run the business alongside her brother, Santo, since their sibling Gianni’s murder in 1997.
“This is a very exciting moment for Versace,” Donatella, who is the brand’s creative director and vice-president, said on Tuesday.
“It has been more than 20 years since I took over the company along with my brother Santo and daughter Allegra.”
Donatella, who holds a 20 per cent stake in the business, will stay onboard as creative director and the family will become shareholders in the larger business.
Santo now holds a 30 per cent stake and Allegra, 50 per cent.
Kors said on Tuesday that it plans to open 100 new Versace stores while increasing the brand’s online sales.
“With the full resources of our group, we believe that Versace will grow to over $2 billion in revenues,” John Idol, chairman and CEO of Michael Kors, said.
“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.”
The deal is expected to close in the fiscal fourth quarter.
