Michael Kors bags Versace for $2.1 bn

The 40-year-old fashion house, founded by Gianni Versace, celebrates extravagance with its baroque designs, filling runway shows and red carpets with brash prints and vibrant color.

Versace will continue to be led by ceo Jonathan Akeroyd.

While the Versace family has owned the company for the major part, private equity firm Blackstone Group too has a 20% stake in the company.

Versace fans used all kinds of colorful comparisons to criticise the sale of the Iconic Italian fashion brand sale to Michael Kors, taking to social media to mourn what they saw as the brand's sullied legacy.

The luxury brand, founded by Gianni Versace in 1978 and now helmed by his sister Donatella, sells high-end goods that often sell for five times as much as Michael Kors' sportswear items, says The Associated Press.

The company said it plans to increase Versace's sales to US$2 billion annually, more than double the current level, expanding the number of stores globally to 300 from about 200 and accelerating e-commerce development.

The deal could also mean that those iconic $2,000-a-pop Versace gold-colored jackets once worn only by Hollywood elites, including Michael Jackson, Paul McCartney and Madonna, may soon become more affordable.

Michael Kors is still the chief creative director and the honorary chairman, but his company will be renamed Capri Holdings Ltd.as it brings more big names under its umbrella, it was announced Tuesday.

The Versace family, which now owns 80 per cent of the fashion house via a holding company called Givi, will receive 150 million euros of the purchase price in Capri shares.

The transaction, which is expected to be closed in the fourth quarter, singles big changes for what is now Capri.

"My passion has never been stronger", she said in a statement.

Budding conglomerates like Michael Kors have been trying to make in-roads into an industry dominated by European players such as Louis Vuitton-owner LVMH (LVMH.PA) and Kering (PRTP.PA).

Versace could benefit from Kors' expertise in accessories and omnichannel development.

Versace does not disclose financial details, but filed documents showing 2017 sales were €668m and earnings before interest, tax, depreciation and amortisation (EBITDA) €45m.

Versace is the latest Made-in-Italy name to be snapped up by a foreign company.

Shares of Kors were down about 2 percent in premarket trading following the news.