Michael Kors bags Versace for $2.1 billion

Michael Kors Reaches Deal to Buy Italian Fashion House Versace

Michael Kors Reaches Deal to Buy Italian Fashion House Versace

"We believe that being part of this group is essential to Versace's long-term success", Donatella said, as part of the company statement on Tuesday.

Michael Kors said Tuesday it will acquire Versace in a cash-and-stock deal with an enterprise value of €1.83 billion ($2.12 billion).

With its recent acquisition, the Michael Kors team hopes to increase the global retail footprint of Versace, from approximately 200 to 300 stores.

READ ALSO: Versace for sale?

Versace is now 80% controlled by the late designer's family, with private equity firm Blackstone holding a 20% stake.

"Gianni Versace didn't die for his ICONIC brand to be sold to some cheap & tacky designer who is the epitome of locals knowledge on designer brands & whos bags u can't even tell the difference between the fakes they sell in Turkey", read one viral response.

The Versace family, which now owns 80 per cent of the fashion house via a holding company called Givi, will receive 150 million euros of the purchase price in Capri shares.

The deal is expected to close in the fiscal fourth quarter.

JPMorgan Chase and Barclays advised Kors on the deal.

She added in the statement: "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".

Michael Kors aims to lift Versace's accessories and footwear to 60 percent of sales from 35 percent, an ambitious goal for a company known better for its ready-to-wear fashions. "That is going to change with the resources of Capri behind them", Idol added, in a call with analysts, explaining that the group's runway line would remain the main "focus".

Versace does not disclose its financial details, but documents deposited with the Italian chamber of commerce show that previous year it posted sales of 668 million euros and earnings before interest, tax, depreciation and appreciation (EBITDA) of 45 million euros. Gucci is the biggest brand in Kering, which also Bottega Veneta and menswear brand Brioni.

Shares of Kors were down about 2 percent in premarket trading following the news.

Versace is the latest Made-in-Italy name to be snapped up by a foreign company after Rome-based Fendi, celebrity jeweller Bulgari and cashmere maker Loro Piana were all bought by LVMH.

Fans fretted on social media about the red carpet favourite losing its appeal, while Italian politicians mourned the loss of another of the country's cherished brands.