"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", said Idol, who also added that Donatella Versace will continue to lead the company's creative vision.
"Some of the work required on Versace, which includes toning down some of the brasher elements of the brand which are now out of step with the more subtle tone preferred by modern consumers, are precisely the issues with which Michael Kors has struggled and is yet to satisfactorily resolve", said Neil Saunders, Managing Director of GlobalData Retail.
US private equity firm Blackstone, which bought 20 percent of Versace for 210 million euros in 2014, will make a 156 million euro capital gain by exiting its investment, Reuters calculations show.
The late Italian fashion designer Gianni Versace in a 1996 file photo. It also staged a triumphant runway reunion of Gianni's legendary 1990s model posse - Naomi Campbell, Cindy Crawford, Carla Bruni, Claudia Schiffer and Helena Christensen - all wearing versions of Gianni's slinky signature Oroton chainmail dresses as a celebration of legacy and survival.
The Versace family still controls 80 percent of the company.
The US fashion company also said Versace will fall under its "Capri Holdings" banner upon the closing of the deal, alongside Michael Kors itself and and Jimmy Choo. Jonathan Akeroyd, now Versace's CEO, will continue to lead the management team. She presented her latest collection for next spring and summer last Friday during Milan Fashion Week.
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.
Michael Kors lifestyle stores now number 770 globally.
"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", said Jonathan Akeroyd, Chief Executive Officer of Versace. It's still trying rebuild its reputation after broadly distributing its products to department stores and outlet malls, which damaged the brand's image. "This is a very exciting moment for Versace", the designer said in a statement. The size of the company will provide Versace with a more global reach, especially in Europe and Asia, he said. "This will absorb both time and money from the group and has to be done in tandem with the ongoing efforts to put Michael Kors firmly on the right track".
The deal is expected to close in the fourth fiscal quarter, subject to regulatory approvals. Shares of Kors fell 2 per cent before the market open.