>> US handbag maker Michael Kors could be set to buy one of Italy's oldest fashion houses, Versace. Sources telling Reuters the deal is valued at about $2 billion. Reuters' Pamela Barbaglia in London says the head may have overruled the heart for the Versace family.>> Obviously, the owners are emotionally attached to their companies.
But in this market, especially with the decline in spending in luxury, especially in Europe, it's important to find a partner. And for them, it's a choice of a French partner, especially Louis Vuitton
or an American partner.>> Michael Kors has made no secret of its ambition to grow its portfolio of high-end brands.
Last year, it snapped up British stiletto heel maker Jimmy Choo for over $1 billion. Now, Michael Kors is putting a high value on Versace. Last year, the fashion house posted a net profit of just $17 million, after recording a loss the year before. The US brand is keen to make inroads into an industry still dominated by European names.
>> Well, you have to just think of the perception, the emotional value. But Michael Kors is attached to this business. They just want to expand globally, and this is a brand everyone knows, and will give them access to new markets.>> Also selling up would be US private equity firm Blackstone.
It took a 20% stake in the Milanese fashion house four years ago. Now, it's thought there will still be a role in the company for Donatella Versace, sister of the brand's late founder, Gianni.>> The announcement of the deal could come as early as next week. Donatella has called a staff meeting for Tuesday, according to a person who was briefed by a company employee.