Michael Kors’ parent company announced this week it was acquiring Versace in a multibillion-dollar deal. It’s just the latest big move for Michael Kors himself, who went from college dropout to fashion world multibillionaire. Here’s how he did it.
From FIT to Bergdorf’s
In 1977, Kors enrolled at the Fashion Institute of Technology in New York, but dropped out nine months later when given the opportunity to sell his designs at New York shop Lothar’s. Eventually, after a buyer saw his collections in the shop window, he was able to sell his designs at Bergdorf Goodman, and his career took off from there.
Kors started his namesake collection in 1981, and had his first runway show in 1984. He gained a group of celebrity fans, ranging from Aretha Franklin to Sharon Stone to Courtney Love.
A Downturn in the 1990s
Kors looks back at the 1990s as a down point in his career, because of a combination of financial issues and an economic downturn. "It was a domino effect….And then the next thing you knew, it was all about nose rings and ugly. I mean, it was a trifecta of a nightmare for me,” he told ABC News, adding he learned to be true to himself during this slump. "The customer will appreciate that," he said, "and they will stick through thick or thin with you if you do that."
He ended up filing for bankruptcy protection in 1993, when an Italian company declined to continue producing his lower-priced licensed collection, KORS Michael Kors. "Because of the loss of licensing income," he told The New York Times at the time, "we had no choice but to do this. Quite frankly, it was a combination of many things, including the loss in volume as a lot of stores, especially small boutiques, went out of business. In the last two years, we lost a good 15 to 20 stores nationwide."
Bouncing Back, With Help From Céline
Kors restructured in 1997 when LVMH invested in his company and he launched a lower-priced line. That same year, he was hired as the designer of LVMH-owned Céline, and became the brand’s creative director the following year. At Céline, he was credited with turning the brand around with well-received ready-to-wear collections and accessories. He stayed until 2004, when he decided to leave to focus on his own brand.
A lot happened very quickly around that time. In 2003, Sportswear Holdings Ltd. bought an 85 percent stake in the company. In 2004, he launched MICHAEL Michael Kors, a diffusion line that performed well during the recession, and expanded into perfume, watches, and handbags, while also opening “lifestyle” stores across the country. He also signed up for Project Runway, where he’d become a mainstream household name beyond the fashion world as a judge. He stayed on the judges’ panel until 2012.
Going Public, and Making Bank
In 2011, Michael Kors Holdings went public. By 2014, Kors became a billionaire after shares of the company went up by 18 percent. Forbes reported he had a $360 million stake of the company, plus more money from the value of the stock he sold over the previous few years. Two people with controlling stakes in his company, Silas Chou and Lawrence Stroll of Sportswear Holdings Ltd., became billionaires before he did thanks to the company’s success.
In 2015, his company raked in more than $4.5 billion in net sales. Even still, the company announced in 2017 they would close up to 125 stores because of low sales. Nevertheless, in 2017, Michael Kors Holdings bought Jimmy Choo in a deal worth $1.2 billion.
What’s Ahead for Michael Kors and Versace
Michael Kors Holdings is changing its name to Capri Holdings Ltd. after purchasing Versace for about $2.2 billion. And Bloomberg reports the company has big plans for Versace, like doubling the brand’s sales. It plans to do so by boosting e-commerce, opening new stores, and expanding to markets in Asia. It also plans to sell more shoes and accessories.
“If you look at some of the other Italian luxury brands—which will remain nameless—they are doing in the billions of euros today,” Kors CEO John Idol said on a conference call announcing the acquisition. “So Versace is terribly underdeveloped and that’s really going to change now that they’ll have the resources of Capri behind them.”
FAQs
By combining pragmatism with an unerring sense of chic, Kors' unique take on “all American sportswear” would eventually go global. Kors was successful from the start, designing chic, luxurious sportswear that was both glamorous and effortless.
How much did Michael Kors pay for Versace? ›
By buying Versace for US$2.1 billion, Michael Kors is spending a significant amount of money precisely to grow the group – now renamed Capri Holdings – around its own brand.
Why did Versace sell to Michael Kors? ›
First of all, it allows the US group, which last year bought British footwear label Jimmy Choo for GBP896 million (€1 billion), to add to and diversify its portfolio. Also, it will enable Michael Kors to go even more upmarket, by acquiring a luxury label with a major tradition and great visibility.
Who actually buys Versace? ›
The company that owns Versace is being bought by the luxury goods group Tapestry in a deal worth $8.5bn (£6.7bn).
What makes Michael Kors so special? ›
Michael Kors is the leading American fashion designer of luxury accessories and ready-to-wear. The company's heritage is rooted in iconic designs with a glamorous aesthetic that combines stylish elegance and a sporty attitude.
Why is Michael Kors so expensive? ›
A certain product's price is determined by the materials used, the design chosen, and the process by which it is made available for retail sale. It is common for a product with a high demand to be expensive. Michael Kors' quality and luxury status actually make it a pricey brand.
Who owns 20% of Versace? ›
In February 2014, The Blackstone Group purchased a 20 percent stake in Versace for €210 million.
How rich was Versace when he died? ›
At the time of his death, Versace's empire was valued at $807 million and included 130 boutiques across the world.
How much did Versace pay for his mansion? ›
Obsessed with Greek and Roman mythology, Versace purchased the original house built by Freeman for $2.95 million and the lot next door, an old art deco hotel called the Hotel Revere.
Did Coach buy Versace? ›
$8.5 billion acquisition puts fashion giants Versace, Coach and Michael Kors under one company. Tapestry Inc., the company that owns Coach, Kate Spade and Stuart Weitzman, is acquiring major luxury group Capri Holdings, the parent company of Versace, Jimmy Choo and Michael Kors, it announced Thursday.
The takeover by the American multinational luxury fashion holding company Tapestry could rival European conglomerates like LVMH and Kering. Versace's parent company has announced it's being bought by the luxury goods group Tapestry.
Who is the CEO of Versace? ›
LONDON--(BUSINESS WIRE)-- Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced the appointment of Emmanuel Gintzburger as Chief Executive Officer of Versace effective September 12, 2022. Mr. Gintzburger will report to John D. Idol, Chairman and Chief Executive Officer of Capri Holdings.
Who is the woman who owns Versace? ›
Donatella Versace is the artistic director and co-owner of Versace, one of the world's leading luxury fashion brands. Ms. Versace was born in Reggio Calabria in southern Italy, the younger sister to Gianni and Santo.
Who is worth more Gucci or Versace? ›
Gucci Has A Higher Net Worth Than Versace
For example, Gucci has a value of more than $7 billion in 2017, and its net worth is increasing continuously. On the other hand, Versace, which is currently managed by Donatella Versace, the sister of Gianni Versace, has a total value of around $1.7 billion.
What is Michael Kors brief history? ›
The MICHAEL KORS story
The history of the MICHAEL KORS company began in 1981, when the designer launched his first women's label at Bergdorf Goodman. He went on to launch KORS Michael Kors as a licensed range in 1990. In 1997, Kors took on the role of the first women's ready-to-wear designer at Celine.
What inspired Michael Kors? ›
Kors' affinity for fashion started when he was very young. His mother thought his affinity might have been caused in part by his exposure to the apparel industry through her modeling career. Michael, at the age of five, even redesigned his mother's wedding dress for her second marriage.
How did Michael Kors' background influence his choices? ›
Kors mother is jewish, and his father is swedish, so he is half and half. His background influenced his choices and outcomes in a very good way because he is so into girl fashion that he made his own company and its very successful to this day.
