Donatella Versace, the firm's artistic director and vice-president, has called a staff meeting in Milan for Tuesday, Corriere della Sera reported. Last year, the London-based Michael Kors scooped up Jimmy Choo for $1.2 billion.
Carla Bruni, Claudia Schiffer, Naomi Campbell, Cindy Crawford & Helena Christensen returned to give the Milan catwalk a distinctly 90s vibe. Now, it's vying with Coach owner Tapestry Inc.to build a USA -based multibrand fashion empire along the lines of Paris-based conglomerates LVMH and Kering SA.
In recent years, Versace, which is still a favor among celebrities, has struggled to grow sales and has become second to its Italian rival Gucci, who has found a way to grow, especially among millennials. "I believe he is going to create some sort of brand diffusion with the essence of Versace's DNA".
Versace, known for its bold and glamorous designs, is one of a clutch of family-owned Italian brands seen as attractive targets at a time when the luxury industry is benefiting from strong demand from China.
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A representative for Versace declined to comment on the potential transaction. Bloomberg and Reuters news agencies later reported the buyer would be fashion group Michael Kors. The shares have recovered since then, trading 15 percent higher for the year, with Choo boosting the latest quarterly results.
Versace, known for its flamboyant style and Medusa-head logo, hired CEO Jonathan Akeroyd in 2016 from Alexander McQueen.
Again, Michael Kors is aiming to bolster its roster of luxury brands including those in the fashion, footwear, and accessories categories. The company had been working toward an initial public offering, though market conditions haven't allowed it to move ahead.
She holds a 20 per cent stake in the company, her daughter Allegra has a 50 per cent stake, while Santo, Donatella's brother, holds the remaining 30 per cent. Tiffany & Co. LVMH, PVH Corp. and Tapestry have all shown interest in purchasing Versace. The 40-year-old fashion house returned to profit in 2017 and reported revenue of almost $800 million.