Expanding Global Fashion Luxury Group with
Acquisition of Versace
Michael Kors Holdings Limited (NYSE:KORS), a global fashion
luxury group, announced today that a definitive agreement has been
signed to acquire all of the outstanding shares of Italian
luxury fashion house Gianni Versace S.p.A. for a total enterprise
value of Euro 1.83 billion or approximately US$2.12 billion.
Versace, long recognized as one of the world’s leading luxury
fashion companies, is synonymous with Italian glamour and
style.
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L-R: Jonathan Akeroyd, Donatella Versace,
John D. Idol. (Photo: Rahi Rezvani)
John D. Idol, Chairman and Chief Executive Officer of Michael
Kors Holdings Limited, said, “The acquisition of Versace is an
important milestone for our group. Versace was founded in 1978. For
over 40 years, Versace has represented the epitome of Italian
fashion luxury, a testament to the brand’s timeless heritage. We
are excited to have Versace as part of our family of luxury brands,
and we are committed to investing in its growth. With the full
resources of our group, we believe that Versace will grow to over
US$2.0 billion in revenues. We believe that the strength of the
Michael Kors and Jimmy Choo brands, and the acquisition of Versace,
position us to deliver multiple years of revenue and earnings
growth.”
Mr. Idol continued, “Donatella’s iconic style is at the heart of
the design aesthetic of Versace. She will continue to lead the
company’s creative vision. I am thrilled to have the opportunity to
work with Donatella on Versace’s next chapter of growth.”
“This is a very exciting moment for Versace,” said Donatella
Versace. “It has been more than 20 years since I took over the
company along with my brother Santo and daughter Allegra. I am
proud that Versace remains very strong in both fashion and modern
culture. Versace is not only synonymous with its iconic and
unmistakable style, but with being inclusive and embracing of
diversity, as well as empowering people to express themselves.
Santo, Allegra and I recognize that this next step will allow
Versace to reach its full potential. We are all very excited to
join a group led by 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. My passion has never been stronger. This is the perfect
time for our company, which puts creativity and innovation at the
core of all of its actions, to grow.”
Donatella added, “Santo, Allegra and I will become shareholders
in Capri Holdings Limited. This demonstrates our belief in the
long-term success of Versace and commitment to this new global
fashion luxury group.”
“Versace’s management team will continue to be led by Chief
Executive Officer, Jonathan Akeroyd, who has been an instrumental
partner to Donatella in driving growth and success for Versace
worldwide,” added John D. Idol. “He and Donatella have assembled
strong senior management and design teams that will continue to
lead Versace into its next chapter. We are extremely fortunate to
be able to acquire such an extraordinary brand with an incredibly
talented team.”
Jonathan Akeroyd, Chief Executive Officer of Versace, said,
“Since I joined Versace over two years ago, our focus has been on
leveraging the company’s heritage and strong brand recognition
worldwide, which has allowed us to experience significant growth in
all regions. Donatella’s unmatched vision has led to the continued
and growing success of our brand. I am thrilled to be joining Capri
Holdings Limited, which will be instrumental in accelerating our
growth globally.”
Strategic Initiatives and Transaction Rationale
As part of our strategic plan for the long-term growth of
Versace, we intend to execute on the following key initiatives:
- Grow Versace to US$2.0 billion in
revenues globally
- Build on Versace’s luxury runway
momentum
- Enhance Versace’s powerful and iconic
marketing
- Increase global retail footprint from
approximately 200 to 300 stores
- Accelerate e-commerce and omni-channel
development
- Expand men’s and women’s accessories
and footwear from 35% to 60% of revenues
The acquisition of Versace is expected to deliver a number of
benefits for our Company, including:
- Opportunity to help grow our group’s
revenues to US$8.0 billion in the long-term
- Expand our global luxury group to
include three iconic founder-led brands defined by fashion luxury
products with a reputation for world-class design and
innovation
- Diversify our geographic portfolio
from:
- 66% Americas to 57% Americas
- 23% Europe to 24% Europe
- 11% Asia to 19% Asia
- Potential to create long-term
operational synergies
Transaction Details
The transaction is not subject to a financing condition. The
cash portion of the purchase price is expected to be funded by a
combination of cash on hand, drawings under the company’s existing
revolving credit facility, and committed underwritten bank term
loans from our advisors JPMorgan Chase Bank, N.A. and Barclays. The
Versace family will also receive Euro 150 million of the purchase
price in shares of Capri Holdings Limited. The transaction is
expected to close in the company’s fourth fiscal quarter, subject
to specified closing conditions, including the receipt of required
regulatory approvals.
Our New Name
Capri Holdings Limited (NYSE:CPRI) is the new name to be adopted
by Michael Kors Holdings Limited upon the closing of the
acquisition. Our name is inspired by the fabled island which has
long been recognized as an iconic, glamorous and luxury
destination. The island’s spectacular three rock formation, formed
over 200 million years ago, is symbolic of the timeless heritage
and strong foundation that is at the core of each of the three
founder-led brands in our global fashion luxury group.
Financial Considerations
The company believes that the acquisition of Versace enhances
the company’s economic value and will drive improved long-term
shareholder value by accelerating long-term revenue and EPS growth
potential. On a non-GAAP basis the acquisition is expected to be
dilutive to earnings per share in the high-single digits in fiscal
2020, accretive in the low-single digits in fiscal 2021, and
accretive in the high-single digits in fiscal 2022.
Conference Call and Additional Information
The company will host a conference call to discuss the
transaction at 8:45 a.m. ET today, September 25, 2018. Participants
may dial 1-800-289-0438 or 1-323-794-2423, conference ID: 9704344.
A live webcast of the conference call will also be available on the
investor relations portion of the Michael Kors Holdings Limited
website, www.investors.michaelkors.com. A replay of today’s call
will be available through October 2, 2018 by dialing 1-844-512-2921
or 1-412-317-6671, conference ID: 9704344. For additional
information concerning the transaction, please see the investor
presentation available on the Investor Relations page of the
Michael Kors Holdings Limited website at
www.investors.michaelkors.com. For the avoidance of doubt, the
contents of this website are not incorporated into and do not form
part of this press release.
About Michael Kors Holdings Limited
Michael Kors Holdings Limited is a global fashion luxury group,
consisting of iconic brands that are industry leaders in design,
style and craftsmanship. Its brands cover the full spectrum of
fashion luxury categories including women’s and men’s accessories,
footwear and ready-to-wear as well as wearable technology, watches,
jewelry, eyewear and a full line of fragrance products. The
company’s goal is to continue to extend the global reach of its
brands while ensuring that they maintain their independence and
exclusive DNA. Michael Kors Holdings Limited is publicly listed on
the New York Stock Exchange under the ticker KORS.
About Versace
Founded in 1978 in Milan, Versace is one of the leading
international fashion design houses and a symbol of Italian luxury
worldwide. It designs, manufactures, distributes and retails
fashion and lifestyle products including haute couture,
prèt-à-porter, accessories, jewelry, watches, eyewear, fragrances,
and home furnishings all bearing the distinctive Medusa logo. The
Versace group distributes its products through a worldwide
distribution network which includes over 200 boutiques in some of
the world’s most glamourous cities.
Forward-Looking Statements
This press release contains statements which are, or may be
deemed to be, “forward-looking statements.” Forward-looking
statements are prospective in nature and are not based on
historical facts, but rather on current expectations and
projections of the management of Michael Kors Holdings Limited (the
“Company”) and Gianni Versace S.p.A (“Versace”) about future
events, and are therefore subject to risks and uncertainties which
could cause actual results to differ materially from the future
results expressed or implied by the forward-looking statements. The
forward-looking statements contained in this press release include
statements relating to the expected effects of the acquisition on
the Company and Versace, the expected timing and scope of the
acquisition and other statements other than historical facts. All
statements other than statements of historical facts included in
this press release may be forward-looking statements. Without
limitation, any statements preceded or followed by or that include
the words “targets”, “plans”, “believes”, “expects”, “aims”,
“intends”, “will”, “should”, “could”, “would”, “may”,
“anticipates”, “estimates”, “synergy”, “cost-saving”, “projects”,
“goal”, “strategy”, “budget”, “forecast” or “might” or, words or
terms of similar substance or the negative thereof, are
forward-looking statements. Forward-looking statements include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, economic performance,
indebtedness, financial condition, share buybacks, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of the Company’s and
Versace’s operations and benefits from the acquisition; and (iii)
the effects of government regulation on the Company’s or Versace’s
business. These forward-looking statements are not guarantees of
future financial performance. Such forward-looking statements
involve known and unknown risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many risks, uncertainties and other factors could
cause actual results to differ materially from those projected or
implied in any forward-looking statements. These risks,
uncertainties and other factors include the satisfaction of the
conditions to consummating the acquisition, timing of closing of
the acquisition, the Company’s ability to integrate the businesses
successfully and to achieve anticipated benefits of the
acquisition; the risk of disruptions to the Company’s or Versace’s
businesses; the negative effects of the announcement of the
proposed acquisition or the consummation of the proposed
acquisition on the market price of the Company’s ordinary shares
and its operating results; significant transaction costs; unknown
liabilities; the risk of litigation and/or regulatory actions
related to the proposed acquisition; fluctuations in demand for the
Company’s and Versace’s products; future levels of indebtedness;
future availability of credit; the timing and scope of future share
buybacks, which may be suspended at any time due to market
conditions and the level of other investing activities and uses of
cash, including in connection with the pending acquisition; changes
in consumer traffic and retail trends; loss of market share and
industry competition; fluctuations in the capital markets;
fluctuations in interest and exchange rates; the occurrence of
unforeseen disasters or catastrophes; political or economic
instability in principal markets; adverse outcomes in litigation;
and general, local and global economic, political, business and
market conditions, as well as those risks set forth in the reports
that the Company files from time to time with the U.S. Securities
and Exchange Commission. Other unknown or unpredictable factors
could cause actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors. Unless
otherwise required by applicable law, neither the Company nor
Versace, nor any of their respective associates or directors,
officers or advisors, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this press release will actually
occur. Due to such uncertainties and risks, readers are cautioned
not to place undue reliance on such forward-looking statements. All
subsequent oral or written forward-looking statements attributable
to the Company or Versace or any of their respective members,
directors, officers or employees or any persons acting on their
behalf are expressly qualified in their entirety by the cautionary
statement above. The Company and Versace disclaim any obligation to
update or revise any forward-looking or other statements contained
herein other than in accordance with their legal and regulatory
obligations.
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version on businesswire.com: https://www.businesswire.com/news/home/20180925005557/en/
Michael Kors Holdings LimitedKatina Metzidakis,
201-514-8234InvestorRelations@MichaelKors.comorMedia:Michael Kors
Holdings LimitedFrancesca LeoniPress@MichaelKors.com
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