American fashion company Michael Kors agreed to buy Italian brand Versace for $2.35B, positioning the “affordable-chic” Michael Kors brand to compete with Europe’s biggest and bougiest luxury fashion brands.
Fashion giants are buying each up other like trendy handbags
Consolidation is in this season: Luxury Italian suit-maker Ermenegildo Zegna bought American menswear outfit Thom Browne last month, and Swiss luxury titan Richemont purchased luxury e-commerce platform Net-a-Porter in May for $3.3B.
American fashion is copying Europe’s style
High fashion has long been centered in Europe. Case in point: The world’s 3 biggest fashion conglomerates are Moet Hennessy Louis Vuitton (France), Richemont (Switzerland), and Kering (France).
Now, Michael Kors wants to beat European high fashion at its own exclusive game, purchasing British luxury shoemaker Jimmy Choo last year for $1.2B and now Versace.
But here’s the thing — Kors might be fancy, but it’s not Versace-fancy. Kors handbags sell for under $500, while Versace’s start at $1.5k. Not all investors are convinced the company can pull off the merger: Kors shares fell more than 9.5% yesterday after the deal was announced.