Michael Kors Holdings Limited to Be Renamed Capri Holdings Limited
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.
Michael Kors Holdings Limited
Katina Metzidakis, 201-514-8234
InvestorRelations@MichaelKors.com
or
Media:
Michael Kors Holdings Limited
Francesca Leoni
Press@MichaelKors.com
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