Many people have been talking about Michael Kors’ acquisition of Versace for $2.12 billion as if it is the end of the iconic Italian fashion house. How can a company known for their glamour, opulence and baroque designs become owned by a mall brand?
Michael Kors is known for being a luxury brand for the middle class. Jokes and memes have flooded social media about how this purchase will lead to Versace being found in discount department stores like Marshalls and TJ Maxx. Just because Michael Kors bought Versace does not mean you are going to find a Palazzo Empire bag on clearance. Versace is going to remain Versace.
While others view this as being a reckless decision on the Versace family’s part, I feel that this decision will only help Versace’s image and allow them to grow. The image of Versace will not become that of Michael Kors with this purchase. This is a misinformed idea that has been spreading with the news that Michael Kors will change the name of his new fashion conglomerate to Capri Holdings Ltd.
This purchase will likely be a good move for Versace because Kors is planning on focusing more on accessories, shoes and expanding in the European and Asian markets. Let’s remember that Versace has had financial issues for decades even before Gianni’s death, and Michael Kors has the money to fund the company and rid the family of their financial woes.
Bringing a larger focus to shoes and accessories is what Michael Kors is good at. These are the price entry items that can create Versace fans in younger, less privileged customers. Versace has arguably lost a lot of their “cool factor” in the fashion industry, particularly since Alessandro Michele’s arrival as creative director at Gucci in 2015.
Italians have been particularly upset at Kors’ purchase of Versace as there is a concern of losing an independent, family-owned atelier. Dolce & Gabbana and Giorgio Armani remain family-owned, and houses like Prada remain independent. Will these be the next to be bought by Capri Holdings?
Losing an independent company is a legitimate concern, but Versace is not losing the family vision as Donatella is staying on board as creative director. On the same note, the Versace family has shares in Capri Holdings Ltd., meaning they now have a financial stake in Jimmy Choo and Michael Kors. If anything, this will only allow Versace’s influence to expand.
It is in the best interest of Capri to keep Versace as authentically Versace as possible. Kors changing the name of his holdings company to Capri Holdings Ltd. after the Italian isle is a hint into how Kors realizes the importance of Italy’s image and culture to the Versace brand. Versace will die if it becomes Americanized, and Kors knows this.
If Versace makes a radical change away from their luxe prints to the arrays of beige pleather Kors is known for, there will undoubtedly be an upset. This will not happen because everyone who is a part of this deal knows how different a Michael Kors customer is from a Versace customer.
This will be the first American-based luxury fashion conglomerate, something Tapestry/Coach has been attempting in the past. Some have questioned whether Capri Holdings could become a monopoly, but that is nonsense as each brand under Capri specializes in a different market. Kering and LVMH will still be the larger, more financially successful luxury conglomerates anyways.
Michael Kors will not be the end of Versace as a label known for glamour, but it will be the end of being an independent company. Despite losing their independence, Donatella is remaining on board as creative director and her love for Gianni will not allow this brand to fail. Michael Kors buying Versace is only the beginning of a new age in Versace’s success.