Versace: Italian glamour at its finest. Michael Kors: an American brand who’s household name became popular thanks to its affordable brand-name bags. At face value, these two brands have very little in common. Regardless of this fact, Versace is now owned by Michael Kors, or the newly named “Capri Holdings.” Versace is not the only brand Kors has acquired; only last year Kors bought Jimmy Choo for £685 million ($900 million).
Bought for £1.64 billion ($2.1 billion), Versace has now turned from a family owned European brand into a world-wide fashion conglomerate. According to The Motley Fool, this deal is “viewed as one that will not build up Kors but rather will tear down Versace.” This is largely due to the fact that Kors is often viewed as a “wannabe” haute couture brand, whereas Versace already has a firm place in the couture world. Critics worry that Kors’ acquirement of Versace will only serve to lower the status of the brand.
Brands going “down market” is not a new trend. Target, one of the first companies to do this, rolled out a Mossimo designed fashion line in the late 90s and early 2000’s; JC Penny, Kohl’s, and Payless have all followed this trend, releasing clothing lines designed by other well-known designers. Just recently, Kenzo designed clothing for H&M. The same approach has also been seen at the other end of the market, with powerhouses such as Tiffany & Co and Burberry selling products that could be marketed to the masses — not only people with deep pockets.
With all this being said, however, Michael Kors is still attempting to raise the profile of their brand. Over 100 stores have been closed down in an attempt to reshape their image to one of luxury. This will be aided in the fact that Versace is not losing it’s main designers and creators. Donatella Versace, the vice-president and artistic director of Versace, is remaining with the company, and seems very optimistic about the merger. She told The Guardian that the merger “is a very exciting moment for 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.”
As the merger is still relatively new, no one knows how this deal will look for Capri Holdings and it’s subsequent brands. Will this merger tarnish Versace? Or will it elevate Michael Kors to a more luxurious brand status? Is the trend of “down marketing” showing that companies need to appeal to the larger market instead of solely those who are rich enough to buy them? Or does this hurt the brands image?
Let us know your thoughts in the comments!