Michael Kors Holdings Ltd. will buy Italian fashion label Gianni Versace SpA for 1.83 billion euros (US$2.2 billion), bringing the American luxury company closer to its goal of becoming an international house of fashion brands.

The company said it plans to increase Versace’s sales to US$2 billion annually, more than double the current level, expanding the number of stores globally to 300 from about 200 and accelerating e-commerce development. Michael Kors said it will rename itself Capri Holdings Ltd. as it develops its multibrand luxury strategy.

“The acquisition of Versace is an important milestone for our group,” Michael Kors Chief Executive Officer John Idol said in a statement. “We are committed to investing in its growth.”

The Versace deal is the third billion-dollar acquisition made by Kors or chief competitor Tapestry Inc. since early last summer, as the two rivals shop for high-profile fashion labels to add to their portfolios. Coach-owner Tapestry bought handbag label Kate Spade for US$2.4 billion last year and Kors purchased high-end shoemaker Jimmy Choo about two months later for around US$1.2 billion.

Versace adds high-end couture credibility and heritage to Kors. The 40-year-old fashion house, founded by Gianni Versace, celebrates extravagance with its baroque designs, filling runway shows and red carpets with brash prints and vibrant color.

Pop Culture

Though it boasts a sizable presence in pop culture, Versace has struggled to increase sales and attract new shoppers, especially in China, even as luxury conglomerates LVMH and Kering SA race ahead. Last year, the brand had revenue of 686 million euros and returned to profit, according to figures provided by the company.

The brand has been at its most prominent in years since a hit show in September 2017 brought back the most iconic looks from founder Gianni’s 1990s collections and designer Donatella Versace co-hosted New York’s Met Gala in May, dressing such pop culture icons as Gigi Hadid and Kim Kardashian.

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 has been undergoing a revitalization with its new multibrand structure in place, after years of heavy discounting and strong competition took a toll on the business. Jimmy Choo’s performance lifted Kors in the last quarterly results, though Michael Kors brand comparable store sales -- a key retail metric -- remained flat.

Versace Sale to Kors Leaves Few Global Luxury Brands Available

The renamed company said it aims to lift sales to US$8 billion “in the long term” from about $5 billion as the latest deal expands its presence outside the U.S.

Versace is still controlled by the family of Gianni, who was killed in Miami in 1997. Donatella, his 63-year-old sister, is the house’s creative director and will “continue to lead the company’s creative vision,” Idol said. Jonathan Akeroyd, currently Versace’s CEO, will continue to lead the management team.

The family will also receive 150 million euros of the purchase price in shares of Capri Holdings.

JPMorgan Chase and Barclays advised Kors on the deal.