NEW YORK, Feb. 26, 2019. (Written and edited by Anton Werner, Writer, Biz Republic) — The latest Michael Kors’ acquisition of Versace and the posterior corporate overhaul to launch Capri Holdings has shacked the luxury world as we understood it until today. This new luxury fashion conglomerate is the first for the U.S., in a world where France, Italy, and Switzerland have traditionally led.
Michael Kors has sealed the acquisition of Italian brand Versace for 2.1 billion US Dollars, adding it to its multi-brand portfolio and renaming the newly created group as Capri Holdings. But more importantly, by acquiring Versace, the American fashion retailer is building its own fashion conglomerate, now entering the major league and competing with French conglomerate LVMH (EPA: MC).
“Michael Kors is looking at the long-run with this investment,” affirms financial publication ‘Seeking Alpha’. Market sources asked by FashionUnited highlighted that this deal strengthens Michael Kors’ position in the global luxury market. As John D. Idol, chief executive of Michael Kors, put it in the official announcement release, this is a “milestone.”
Luxury goods maker LVMH (LVMH.PA) has agreed to buy Belmond (BEL.N), the owner of hotels including Venice’s landmark Cipriani, for a total of $3.2 billion to raise its profile in upmarket hospitality.
LVMH, the firm behind fashion labels Louis Vuitton and Christian Dior, already has hotels including the Cheval Blanc in the prestigious Courchevel ski resort in the French Alps, as well as Bvlgari hotels.
The Belmond deal is LVMH’s largest since it spent 4.3 billion euros in 2011 to buy Bvlgari and 6.5 billion euros in 2017 to gain full control of Christian Dior.
LVMH will “reach critical mass in the ultimate luxury hotel world with one single acquisition,” finance chief Jean-Jacques Guiony told analysts during a call.
“The priority is to develop and improve the profitability of these exceptional brands and nurture complementarity with the LVMH group brands,” he added.
The acquisition will give it properties including the only hotel within the Machu Picchu citadel in southern Peru, Hotel Splendido in Portofino on the Italian riviera and the Copacabana Palace in Rio de Janeiro, moving LVMH further into the fast-growing “experiential” high-end travel and hospitality sector.
“While some investors may question the acquisition, which appears to lie outside LVMH group’s core operations, we believe it is consistent with its long-term strategy focused on offering the consumer a full spectrum of luxury experience,” Berenberg analysts said in a research note.
Guiony said the deal reflected LVMH’s belief that “the future of luxury is in luxury goods and in luxury experiences”.
It also pushes LVMH further into new luxury services at a time of growing concern that Chinese demand for high-end fashion and handbags will start waning amid worries about the health of the world’s second-largest economy and potential damage from Washington’s protracted trade spat with Beijing.
LVMH fashion houses Marc Jacobs, Fendi, Emilio Pucci, Dior, Kenzo, Loewe, Celine, Givenchy and Louis Vuitton were all in the spotlight as they presented their women’s collections for next winter during Women’s Fall Winter 2019/2020 Fashion Weeks in New York, Milan and Paris.