Michael Kors to take control of Versace

The affordable luxury brand known for its handbags, Michael Kors, has agreed to take control of Versace, sources say.

As Fred Katayama reports, the deal values the Italian fashion house at around $2 billion. Michael Kors going glitzy. Sources say the American fashion house has agreed to take control of Versace. They say the deal values the Italian fashion icon at around $2 billion and that an announcement could come this week. Versace declined to comment.

A source says Versace Vice President Donatella Versace, the sister of late founder Gianni Versace will address the staff on Tuesday. The move would take Kors, known as an affordable luxury brand, further in to premium luxury. Last year, the leather handbag maker bagged British stiletto-heels maker Jimmy Choo.

Private equity group Blackstone, which bought a stake in Versace four years ago, found the fashion house’s performance didn’t justify a market listing. A source says it then persuaded the Versace family to consider a sale and introduced them to Michael Kors.

Kors shares fell at the market open on Monday.