DISNEY HAS ALREADY RECOUPED ITS $4 BILLION INVESTMENT IN LUCASFILM Disney’s purchase of “Star Wars” production company Lucasfilm is proving to be one of the smartest acquisitions ever made in corporate America. The deal, worth $4.05 billion in cash and stock, was announced Oct. 30, 2012 and marked the start of a new era in the Star Wars franchise. In just six short years Disney would make back that invest- ment, as the four Star Wars feature films Disney has produced since the acquisition have grossed more than $4.8 billion at the box office, according to comScore. Bob Iger, who became Disney’s CEO in 2005, is no stranger to making big acquisitions and having the pay off. Iger facilitated the purchase of Pixar in 2006 for $7.4 billion and Marvel Entertainment in 2009 for $4 billion. Both produc- tion companies have gone on to make billions at the box office — a whopping $17 billion for Marvel across 20 films and $13.2 billion for Pixar over 13 films, according to Box Office Mojo
MICHAEL KORS IS GOING ALL IN ON HIGH FASHION The handbag maker, Michael Kors acquired the prestigious Italian fashion house, Versace for $2.1 billion, including debt. This allows the American group Michael Kors entry into the luxury fashion world, despite a lack of experience in the sector. It’s a risky move, but one that makes financial sense.
After the deal closes, Michael Kors will change its name to Capri Holdings, inspired by an “iconic, glamorous and luxury destination” island, the company said. It will retain the Michael Kors brand name.
It plans to grow Versace to $2 billion in revenue globally and increase its retail footprint from roughly 200 to 300 stores. It also expects to expand accessories and footwear from 35 percent to 60 percent of revenue.
The deal marks one of the first times an American company has cracked the code of super high-end luxury fashion, typical- ly controlled by LVMH, the owner of Guerlain and Givenchy, and Kering, the owner of Balenciaga and Yves Saint Laurent. Michael Kors had already dipped into European fashion last year by buying shoe brand Jimmy Choo for $1.2 billion.
By acquiring the well-respected Milan-based brand, Michael Kors is not only pursuing its strategy to grow, but also a diversification geared towards luxury, a sector that is growing faster than companies selling to general consumers.
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SPOTLIGHT ON BUSINESS MAGAZINE • DECEMBER 2018
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