Michael Kors buys Versace for $2.1 billion and changes its name

After buying the British shoe designer Jimmy Choo for $1.2 billion last year, Michael Kors announces the acquisition of Versace, the Italian fashion house, for $2.1 billion, including debt. This acquisition means the end of the independence of one of the last prominent stand-alone fashion brands.

As part of the deal, Donatella Versace, 63, who has helped run the company since her brother Gianni was murdered in 1997, will stay on to lead the company’s creative vision.

Chairman and chief executive of Michael Kors, John Idol said Donatella Versace’s “iconic style” would remain at the heart of Versace’s design aesthetic.

"We are all very excited to join a group led by [Michael Kors CEO] John Idol, whom I have always admired as a visionary as well as a strong and passionate leader. We believe that being part of this group is essential to Versace's long-term success," Donatella said in a statement Tuesday.

She said the family believed that Versace had to be sold in order for the brand to “reach its full potential”.

The handbag maker said the company will change its name to Capri Holdings once the deal is completed, after the favourite holiday island of wealthy fashionistas.