Michael Kors Buys Versace in $2.1B Deal. Is this the end?

[lovieluvslux]

Hi Fellow Fashion Lovers,

I have been a follower of Versace since the early 80's. I remember Naomi, Christy, Linda, and Cindy walking their famous Versace catwalk. I own 2 SLG's, 1 tote and 1 pair of earrings from Versace. I've been delaying the purchase of handbags for many reasons, including availability and quite frankly falling under the spell of other designers, like Chanel, LV, YSL- due to marketing!

Now I'm saddened by the news of MK taking over Versace. I felt the same when MK took over Jimmy Choo as well.

So, what do you think of this takeover? Will it kill the Versace brand? Will it elevate it? Will it decrease quality?

I'm not anti-MK for no particular reason. I dislike it when we lose small fashion houses to a shark. I know Kate Spade and all the other designers have seen the same fate.

Any thoughts? Anyone upset about this news?

 

[mpepe32]

I was quite saddened as well, time will tell but I worry about the quality

 

[Sparkletastic]

From what I’ve read, MK wants to become like / compete with LVMH.

If that is the case and the company has a shrewd leadership team, they will use their corporate infrastructure to enhance marketing and distribution. They will also utilize their power to reduce costs that don’t hurt the consumer (supply chain, non product materials such as crating, etc.). These are all good things that will make the brands more viable.

They may however decided to lower quality of the items to increase profitability.
Or they may greatly increase availability by increasing number of stores or even offering widely distributed diffusion lines to increase sales. This is what MK did with his own brand so it’s not unreasonable they would try a version of this strategy with the other brands. These may be smart business moves and increase the overall market share and profitability of the company. The downside this is for discerning / demanding devotees like many TPFr’s. They won’t want the “lesser” products and will either stop buying or buy much less when quality and / or cache drops.

So, I’d say that for MK and MK stockholders this could be a very good thing. For those consumers who want better access to these brands (more stores or lower entry level prices points) this could also be a very good thing. For the brand purist, it’s a wait and see.

 

[doni]

I have never been a Versace fan, even though of course acknowledge that they are a fashion myth of the 80s/90s.
Bottom line is, if even people who loved Versace are not buying Versace, not even when classic Versace signatures (the scarf print) are back in fashion, that is not going to end well...
Plus they branched into cheaper lines that churned out the most horrible stuff.
In my town there is a Versace shop, which is not clear to me how it has survived this long as it is always totally empty. It sits in front of Gucci, where you have concierge-managed queues every weekend. Gucci remains independent from the big luxury groups. But they sell.

 

[favoritethingshawaii]

An interesting article in the Wall Street Journal 9/25/18
https://www.nytimes.com/2018/09/25/...on=click&module=Editors Picks&pgtype=Homepage
The Continental Shock of the Kors-Versace Deal
By Vanessa Friedman
PARIS — It’s official: America has its first global luxury group. Michael Kors’s purchase of the Italian brand Versace for $2.1 billion vaults the company — to be renamed Capri Holdings, after the Italian island — into the ranks of fashion conglomerates, a rarefied world defined by Kering and LVMH Möet Hennessy Louis Vuitton.

Everyone is chattering about what the deal might or might not do for growth, for taking advantage of the Asian market, for back-room synergies and so forth. In his announcement on Tuesday, John D. Idol, chief executive of Kors, called it a “milestone.”

He was right, and not just in terms of Kors but in terms of the fashion and luxury industry itself.

There are implications that go beyond the purely financial to the root of luxury identity and the international fashion world. And they have the potential to be as disruptive, and formative, as any revenue stream. They speak to national pride, and to luxury’s sense of its own history.

And that is why, even as analysts muse over the stock price implications, consumers have taken to Donatella Versace’s Instagram feed to voice their fears and horror about what it could mean, with comments such as: “donatella why would you sell versace? it’s an iconic ITALIAN brand. i’m a pround italian, why would you sell it to an american brand?”

More than many other global industries, luxury fashion has made national identity part of its calling card. “Made in Italy” and “Made in France” are part of its value proposition. Every industry has its own creation myth, after all. (The personal computer born in Steve Jobs’s garage; aviation in the Wright brothers’ bicycle shop.) Luxury’s is rooted in the ateliers of Europe, where couture and craft are regarded as part of the patrimony.

It’s one of the reasons, during the post-recession wave of consolidation, that there was a lot of soul searching and hand wringing in Italy about heritage brands being bought by the French. (LVMH owns Pucci, Fendi, Berluti, Loro Piana and Bulgari; Kering has Gucci, Bottega Veneta and Brioni.)

In this narrative, American fashion is even more of an upstart and a wannabe. This is the country, in industry lore, that once upon a time sent department store employees to spy on the couture shows so retail emporiums could make copies of the clothes. It is the birthplace of sportswear. It is a country where every generation gets to start anew and find its own bliss instead of being burdened with tradition.

For years, when New York Fashion Week was the last of the New York-London-Milan-Paris circuit, it was routinely dismissed as a mere imitation of the trends that came out of Europe. Even when it jumped to the front of the queue in 1998 and proved this wrong, it suffered from the taint of commercialism. When American designers needed to bolster their creative credentials, they often felt the need to make their mark in Paris. As recently as last year, the designers Proenza Schouler and Rodarte left their base in New York to show in France; they have since returned.

Neither loyalty nor longevity assuaged. Marc Jacobs’s 16 years as creative director of Louis Vuitton and the stint Michael Kors himself did at Celine (a highly successful tenure from 1997 to 2004 that has largely been buried under the work of the designers who followed) didn’t serve to legitimize American fashion.

Whenever the question of why the United States didn’t have its own luxury group — or why a few such attempts have failed — came up, part of the answer might have been financial. But mostly it was abstract: America simply wasn’t a culture of historic brands or haute handwork.

There was a gulf, it was said, in understanding.

The Kors-Versace deal challenges all that.

Even if Mr. Idol, in a phone interview from Milan on Tuesday, said Kors was “an international corporation, not an American one or a European one or an Asian one” — with, in fact, its “principal executive office in London” — to most people Kors is by definition American.

Its eponymous founder was, after all, a star for many seasons on “Project Runway.” Kors the brand is cast in the image of Kors the man: a dreamer from Long Island, selling an idea about how to dress while reclining on butter-soft leather seats in a private jet from the Hamptons to Aspen. And now that aspirant — who last year acquired the British accessories house Jimmy Choo — is swallowing up one of the last of the independent Italian houses, known for its baroque decadence and pop culture presence.

Among the rumors around the acquisition, there was talk that Kering had considered Versace and dismissed it as overvalued, an aside that (whether true or not) implies Kors was something of a sucker for a storied Italian name. Other rumors were that the family was looking to get out, and that Versace would be Americanized within a few years.

And yet on the phone call Tuesday, Mr. Idol categorically rejected any suggestion that Ms. Versace would leave the brand after a face-saving amount of time had elapsed, or that another designer would be brought in. She, in turn, reiterated that Versace was and would remain “made in Italy.”

Mr. Idol insisted he saw numerous unexpected parallels between the two companies, not just in growth opportunities and digital invention (which are the kind of parallels that you can see on paper) but in personality (which is harder to test).

Mr. Idol said that when he first met Ms. Versace, only a few months ago, he knew “instantly” that he wanted to work with her. The evening before the agreement was announced, he added, he had dinner with both Mr. Kors, who was not involved in the deal but knew it was happening, and Ms. Versace. His thought: “I’m in trouble. The two of them are the same.”

Both share a sense of humor, a vision for the people in their companies and a belief in optimism on the runway, he said. It is true that theirs is not the aesthetic of bleak existential angst and stringy black but rather glossy manes and sparkling sequins. Both built their brands on the theory of the abiding power of glamour — though the Kors glamour has a certain wind-swept bronzed glow, and Versace’s is more gilded and trussed. Both are also fond of poking fun at their own public caricatures (caricatures they created).

And they have a shared affinity for a fake tan.

All of which is to say that if Mr. Idol is right and the deal works — if the projections he has made prove true and Versace does reach $2 billion in sales over the next few years, Choo $1 billion and Kors $5 billion — it could rebalance not just the group’s portfolio but smash some longstanding conventions within the industry itself.

 

[momtok]

Quite frankly, I feel queasy. I'm a Versace bag fan ... bought three in the last year and a half, all boutique level (Versace does have a couple diffusion lines), either Palazzo or Icon. I LOVE the Icon bag I just got. It's small, but utterly an eye-turner. It's the one with the gold baroque pattern over black, cavier style leather. (I should get a picture posted, I know. It's for my 50th birthday in a month, so I've been a good girl and left it in it's dustbag.)

Anyway .... if I buy any more, they'll have to be ones made before this take-over. Just personal opinion, but I detest Michael Kors. (Not the bags, but the person, to be honest. Just personal opinion, which I believe I'm allowed.)

There's a boutique semi-near me (actually, where we go on our summer vacations), where I've purchased my bags, run by a gentleman who used to work in the fashion industry and had worked with Gianni himself, long, long ago. He still has connections to the house, and is essentially a a re-seller. (He is also an upscale restaurateur, and has Versace fabrics decorating his restaurants). Anyway, he buys a certain amount of stock from the house, puts it in his boutique, and re-sells them new from there. My intention is get another one or two from there, particularly the ones that were purchased by him before Kors was in the picture.

Ugh. Just ugh, ugh, ugh.

 

[lovieluvslux]

So sad, but it sounds necessary for business - I guess. I will make a run next week and purchase my last bag from Versace.

 

[momtok]

Well, I grabbed some pics after all. It feels like I'm typing a swan song here, but so be it. I utterly adore these.

The black bowler is from the Palazzo line, and I got it for our wedding anniversary summer 2017. The leather is so soft and thick, Oh my God.

Burgundy shoulder bag is also Palazzo, and was wedding anniversary this past summer.

The flap one with the Barocco pattern is from the Icon Tribute line (from this past spring/summer collection, when they did a bunch of bags in Gianni Versace's original styles and patterns, for the anniversary of his death). The lock up on the strap is supposed to go in the turnlock down near the bottom, and yes, there is a key in that clochette. I just wouldn't want to use the lock, it would drive me up the wall. That one's for my fiftieth birthday this Halloween. Oh, and the pattern on that is Gianni's design from ... 1981? And the metal on that is solid brass. They brought back, for the Icon/Tribute line, the same brass they used for his bags back then. The leather on it is a caviar (spelling? it's late, I'm tired).

Actually, there's a story to the bowling bag as well. That's Medusa on there. Our daughter (she's almost 16 now, don't go by my avatar pic) didn't like it at first, until I pointed out that Medusa could entrance men/people with one look while she was still beautiful, and after Venus(?) changed her hair to snakes, she could kill them with one look. That's power. Now daughter loves Medusa. .... AND ... one time I was in a store, and a little girl behind me tapped my arm and said "I like your bag". The child could not have been over 6 years old. Her mother was standing behind her, smiling. Well, I teach 3-year old children in Sunday school, so I'm pretty good on my feet with little kids. I said, "Thank you. That's Medusa. She's a strong and powerful girl. Are you a strong and powerful girl?" The girl smiled and said "yes". The mother loved it. So did I.

I'm going to have to get a couple more of the pre-Kors bags. That's pretty much a given. Can't believe I'm sitting here feeling nostalgic.

 

[crystal_cat]

Well, I grabbed some pics after all. It feels like I'm typing a swan song here, but so be it. I utterly adore these.

The black bowler is from the Palazzo line, and I got it for our wedding anniversary summer 2017. The leather is so soft and thick, Oh my God.

Burgundy shoulder bag is also Palazzo, and was wedding anniversary this past summer.

The flap one with the Barocco pattern is from the Icon Tribute line (from this past spring/summer collection, when they did a bunch of bags in Gianni Versace's original styles and patterns, for the anniversary of his death). The lock up on the strap is supposed to go in the turnlock down near the bottom, and yes, there is a key in that clochette. I just wouldn't want to use the lock, it would drive me up the wall. That one's for my fiftieth birthday this Halloween. Oh, and the pattern on that is Gianni's design from ... 1981? And the metal on that is solid brass. They brought back, for the Icon/Tribute line, the same brass they used for his bags back then. The leather on it is a caviar (spelling? it's late, I'm tired).

Actually, there's a story to the bowling bag as well. That's Medusa on there. Our daughter (she's almost 16 now, don't go by my avatar pic) didn't like it at first, until I pointed out that Medusa could entrance men/people with one look while she was still beautiful, and after Venus(?) changed her hair to snakes, she could kill them with one look. That's power. Now daughter loves Medusa. .... AND ... one time I was in a store, and a little girl behind me tapped my arm and said "I like your bag". The child could not have been over 6 years old. Her mother was standing behind her, smiling. Well, I teach 3-year old children in Sunday school, so I'm pretty good on my feet with little kids. I said, "Thank you. That's Medusa. She's a strong and powerful girl. Are you a strong and powerful girl?" The girl smiled and said "yes". The mother loved it. So did I.

I'm going to have to get a couple more of the pre-Kors bags. That's pretty much a given. Can't believe I'm sitting here feeling nostalgic.

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I'm in love with all of your bags! I'll go take some photos of my collection to share with you. I'm also in agreement about the takeover, I can see how it makes business sense but I'm worried that the essence of Versace will be diluted to appeal to a mass market demographic.

 

[crystal_cat]

Here is my collection. The first bag is vintage from around 1992, the two black bags are from a few years ago and the pink clutch is my newest buy, from this summer.

 

[Christofle]

I have never been a Versace fan, even though of course acknowledge that they are a fashion myth of the 80s/90s.
Bottom line is, if even people who loved Versace are not buying Versace, not even when classic Versace signatures (the scarf print) are back in fashion, that is not going to end well...
Plus they branched into cheaper lines that churned out the most horrible stuff.
In my town there is a Versace shop, which is not clear to me how it has survived this long as it is always totally empty. It sits in front of Gucci, where you have concierge-managed queues every weekend. Gucci remains independent from the big luxury groups. But they sell.

How is Gucci independent when it is part of Kering?

 

[papertiger]

I have never been a Versace fan, even though of course acknowledge that they are a fashion myth of the 80s/90s.
Bottom line is, if even people who loved Versace are not buying Versace, not even when classic Versace signatures (the scarf print) are back in fashion, that is not going to end well...
Plus they branched into cheaper lines that churned out the most horrible stuff.
In my town there is a Versace shop, which is not clear to me how it has survived this long as it is always totally empty. It sits in front of Gucci, where you have concierge-managed queues every weekend. Gucci remains independent from the big luxury groups. But they sell.

Gucci belong to Kering. Since the change of CD and CEO in 2015 Gucci have cut costs (usually by waiving quality) and increased sales (including upping sales points selling much more on NAP, Matches, Farfetch etc) Gucci have become the role model for most brands.

Donatella never liked the business side. After her brother died she made fantastic red carpet gowns but it It is clear than in recent years she has been going around in circles using the same iconography and never really hitting her stride. The many changes of the brand name and closing many stores already was a clear indicator something was not right and Versace was struggling. MK promise to increase Versace bags, footwear and accessory sales manifold as an immediate strategy. I guess we have to wait and see what that means to quality.

 

[papertiger]

Here is my collection. The first bag is vintage from around 1992, the two black bags are from a few years ago and the pink clutch is my newest buy, from this summer. View attachment 4205017View attachment 4205019View attachment 4205020View attachment 4205021

your bags, totally Versace but subtle.

 

[papertiger]

How is Gucci independent when it is part of Kering?

Perhaps Doni meant they do their own thing.

It was apparent from the nasty send-off they gave Frida that Kering only had to have a sniff of a slow-down in growth (not even losses) before she was put OUT like the garbage.

 

[momtok]

Here is my collection. The first bag is vintage from around 1992, the two black bags are from a few years ago and the pink clutch is my newest buy, from this summer. View attachment 4205017View attachment 4205019View attachment 4205020View attachment 4205021

Oh I love the Barocco on the first one. (The gentleman who owns the boutique where I got mine ... you should see his restaurant. It's upscale, but well worth the price for amazing Italian food. And he has the barocco pattern in frames on the walls, even on pillows and seat cushions. It's amazing.)

That third one ... how delicate is it? That's actually one I've been considering. (It's from the Vanitas line, yes? Both your second and third, correct?) I *almost* got something Vanitas this past summer when we were there. The reason I didn't (and this will make me sound like a wimp), is that daughter didn't like the tassel. Yes, I know, insert eyeroll. She's our only child though, and she's into bags. So I at least take her thoughts into consideration because once she hits college she'll be borrowing freely. Anyway ... my only other concern was delicacy of the leather. Obviously not a throw around bag, but it's holding up ok? Yes? Vanitas was the first thing that hit my mind, as a "must get yet", when I heard about Kors. (Well, that and a mini-Empire. There's a few I wanted to get yet, and now with the time pressure. Damn you Kors!)