Would Gianni roll over in his grave?
It was announced last week that Michael Kors, the accessory house that was made famous for its line of handbags, wallets, coats and accessories purchased Versace for $2 billion. Just last year Michael Kors purchased the high-end shoe company Jimmy Choo for nearly $1 billion. These purchases signal an aim to move into high-end fashion while making the aforementioned brands deeper household names. Michael Kors plans to make Versace a $2 billion dollar company as it moves forward.
Michael Kors was started by, big surprise here, a man named Michael Kors back in the 1980’s when he dropped out of the Fashion Institute of Technology and began working at high-end retailers along New York’s Fifth Avenue shops. Over the next two decades Kors grew to be a household name in America as the brand shifted from clothing to handbags and accessories. Today the Michael Kors brand makes over $4 billion annually and has over 500 brick and mortar stores and over 1500 in-store boutiques around the world.
Versace, as if we needed to know, is a luxury clothing and accessory brand started by Gianni Versace in 1978. After his murder in Miami in 1997, his sister Donatella took over the company as the lead head of design. Donatella continued to rocket the Versace name into the highest regard in the fashion industry. Its headquarters are in Milan and the brand is often compared to the likes of famous houses like Chanel, Ferragamo and Dior. Today Versace creates a line of ready-to-wear clothing as well as couture and several other lines from handbags to denim.
The Growth of Michael Kors
Up until now Versace was one of the last independent high-end fashion brands left today. Most others are owned by conglomerate companies in the fashion industry. The purchase was Michael Kors’ attempt to rival other umbrella companies in the fashion industry. Kors plans to rename the corporation Capri Holdings Limited once this deal with Versace goes through. The Michael Kors and Versace brands should stay the same in terms of how the consumer sees the product. However, it’s unclear what the outcome will really be.
The two brands are very different. Michael Kors is often the preferred dress of leaders like Michelle Obama and Nicole Kidman. Versace has created its brand around the idea that its consumer base is a sort of high-end party girl. One of the brands most famous dresses (which has an entire Wikipedia page dedicated to its legacy), became famous for the ways in which it challenged conventional high-end fashion at the time.
Time will only tell what this will mean for the future of the three companies. Having a powerful fashion company like Versace under an American conglomerate should be good for American fashion, though.
Julia Sachs is a staff writer at Grit Daily. She covers tech, entrepreneurship and entertainment news and is based in Park City, Utah.