Michael Kors snaps up Versace: sources

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American group Michael Kors has agreed to pay a large premium to take over Italy’s Versace in a deal that could value the company at $A2.8 billion, sources say.

US fashion group Michael Kors Holdings has agreed to take control of Italy’s Versace in a deal that could value the company at $US2 billion ($A2.8 billion), sources familiar with the matter say.

The deal on Monday comes as budding luxury conglomerates, including Michael Kors’ US rival Tapestry, owner of Coach and Kate Spade, are trying to make in-roads into an industry still dominated by major European players, including Louis Vuitton owner LVMH.

Michael Kors, whose namesake label is best known for its leather handbags, has made no secret of its ambition to grow its portfolio of high-end brands after swooping on British stiletto-heel maker Jimmy Choo for $US1.2b ($A1.7b) last year.

Versace is one of a clutch of family-owned, independent Italian brands that have regularly been cited as attractive targets at a time when the luxury industry is riding high on strong demand from Chinese consumers.

The deal gives Michael Kors a mega-brand and red carpet favorite that is among the most recognizable and followed fashion labels in the world.

Two of the three sources who spoke to Reuters said the company had agreed to pay a large premium for Versace, known for its Medusa head logo.

Michael Kors could not immediately be reached for comment. Versace declined to comment.

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