Blackstone to Acquire 20% of Gianni Versace for $287 Million

Gianni Versace SpA, the Italian fashion house that features Lady Gaga in its latest advertising campaign, agreed to sell a 20 percent stake to money-management firm Blackstone Group LP for 210 million euros ($287 million).

Blackstone will inject 150 million euros into Versace and pay 60 million euros for shares owned by the Milan-based company’s family owners, the parties said today in a statement. The transaction values Versace at 1 billion euros, they said.

The deal marks the end of a lengthy search by closely held Versace to find an investor in the maker of $215 sunglasses and $5,925 bomber jackets after hiring Goldman Sachs Group Inc. and Banca IMI SpA in 2012. The fashion company, founded by the late Italian designer of the same name in 1978, said it plans to use the investment to open stores and develop its brands and products before selling shares to the public.

“Now is the moment to give a further acceleration to this company,” Versace Chief Executive Officer Gian Giacomo Ferraris said today in a phone interview. An initial public offering in three-to-five years remains “an ambition,” he said.

Sales should grow 10 percent or more a year through that period, Ferraris said. In 2013, Versace had earnings before interest, taxes, depreciation and amortization of at least 69 million euros on revenue of about 480 million euros.

New Stores

The company plans to open more than 30 stores both this year and next, taking the total to more than 200 by the end of 2015, Ferraris said. Some of those will be for Versace’s so-called diffusion lines such as Versus that together account for less than 40 percent of revenue, he said.

The fashion and luxury industry is consolidating as large groups such as LVMH Moet Hennessy Louis Vuitton SA seek new sources of revenue and small companies turn to investors to help fund growth. Blackstone beat offers for Versace from Bahrain-based Investcorp Bank BSC and CCMP Capital Advisors LLC, according to people familiar with the matter.

Donatella Versace and her brother Santo Versace have helped run the company known by its Medusa-head logo since their brother Gianni’s murder in 1997. Donatella serves as creative director, while Santo is chairman. They will continue to play important roles in the company, Versace said.

The family controls Versace via GIVI Holding SpA. Donatella owns 20 percent of GIVI, Santo owns 30 percent and Donatella’s daughter Allegra, a non-executive director, owns the rest, Ferraris said. Blackstone, the world’s largest private-equity firm, will be the only other Versace shareholder, he said.

Blackstone, which also owns German outdoor apparel specialist Jack Wolfskin, was advised by Lazard Ltd.

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