Michael Kors ups the glamour, buys Versace for $2 billion
By ANNE D’INNOCENZIO and MICHELLE CHAPMAN
Tuesday, September 25
NEW YORK (AP) — Michael Kors is buying the Italian fashion house Versace in a deal worth more than $2 billion (1.83 billion euros), continuing its hard charge into the world of high-end fashion.
The deal Tuesday comes just 14 months after the New York handbag maker spent $1.35 billion adding to its portfolio Jimmy Choo, the shoemaker that rocketed to fame on the high heels of “Sex and the City.”
Like others in the fashion industry, Michael Kors Holdings Ltd. is trying to fire up sales by cranking up the glamour.
Tapestry, once known as Coach, acquired Kate Spade last year. Like Coach, Michael Kors is changing its name as it seeks to reframe how people in perceive it.
Michael Kors remains the chief creative director at Kors, but the expanding company will be renamed Capri Holdings Ltd., with $8 billion in projected annual sales. Versace will be a key engine of growth, executives said in a conference call Tuesday.
Bringing in Versace adds a layer of glitter to the company, which sells handbags for less than $500. Versace bags can fetch five times that figure.
Versace’s flamboyant styles have invoked collective gasps, perhaps most notably when Jennifer Lopez appeared at the 2000 Grammy Awards in a navel-bearing dress.
Versace’s fall styles include midi-dresses with baroque print for $2,950, and vinyl skinny jeans for $1,250.
It becomes is just the latest major Italian fashion house to be folded into the portfolio of a foreign entity, a trend that has raised no shortage of concern about the future of the made-in-Italy marquee.
French conglomerates have been the biggest buyers, with Kering buying Gucci, Bottega Veneta and Pomelato and LVMH taking on Bulgari and Loro Piana.
The Qatari royal family owns Valentino.
Gianni Versace founded the brand in 1978, becoming a major force bringing to prominence Milan ready-to-wear and serving as a daring, sexy counterpoint to Giorgio Armani’s more subdued elegance.
Gianni Versace’s flashy, rock ‘n ‘roll designs and Medusa logo became emblematic of a generation led by Princess Diana and Madonna. He also helped create supermodels, like Naomi Campbell, Cindy Crawford and Claudia Schiffer and was the first to bring celebrities to the front row.
The family-run business was thrown into chaos with Versace’s murder 21 years ago. His sister, Donatella Versace, took over creative direction, while his brother Santo continued on the business side. It had been eyeing a public listing for several years.
The Versace family still controls 80 percent of the company. The investment firm Blackstone owns the remaining 20 percent.
Donatella Versace presented her latest collection for next spring and summer last Friday during Milan Fashion Week.
“This is a very exciting moment for Versace,” she said. “It has been more than 20 years since I took over the company along with my brother Santo and daughter Allegra.”
Donatella, who holds a 20 percent stake in the business, will stay onboard as creative director and the family will become shareholders in the larger business. Santo now holds a 30 percent stake and Allegra, 50 percent.
“With the full resources of our group, we believe that Versace will grow to over $2 billion in revenues,” said John Idol, chairman and CEO of Michael Kors. “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.”
Kors said Tuesday that it plans to open 100 new Versace stores (there are 200 in operation) at the same time that it amplifies online sales of the brand. It also plans to increase Versace’s men’s and women’s accessories and its footwear business from 35 percent, to 60 percent of its overall brand’s sales.
Though sales at Versace have been growing stronger recently, the business had been sputtering. And despite some progress, Michael Kors hasn’t fully rebounded from its malaise. It’s trying rebuild its reputation after broadly distributing its products to department stores and outlet malls, which damaged its image.
Keeping the family involved and Donatella as the creative engine at Versace are both good ideas, said Neil Saunders, managing director of GlobalData Retail. The size of the company will provide Versace with a more global reach, especially in Europe and Asia, he said.
“All that said, we maintain our view that Versace is not a perfect operation,” Saunders said. “While it is iconic and high-profile, there is a lot of work to be done to position it for higher growth. 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 fiscal fourth quarter. Shares of edged slightly lower at the opening bell.
Colleen Barry contributed from Milan.
Opinion: Trump, Sanders, Amazon and You
By Antony Davies and James R. Harrigan
In one generation, Amazon has gone from a small online bookseller to the second most valuable company in the world, trailing only Apple. More amazing still is that Amazon has managed to unite Donald Trump and Bernie Sanders. Politics may make for odd bedfellows, but Amazon has taken it to the next level.
Candidate Trump was first to the Amazon hatred party, saying of CEO Jeff Bezos, “He thinks I’ll go after him for antitrust. Because he’s got a huge antitrust problem … ” That Bezos owns the Washington Post might have had something to do with Candidate Trump’s animosity. But, as president, his animosity hasn’t waned.
Where President Trump is aggravated, one would expect to find Senator Bernie Sanders satisfied. Not so with Amazon. Sanders is at least as hostile toward the online behemoth as Trump, though his irritation manifests for decidedly different reasons. Sanders has staked out a position on Amazon’s employee compensation, recently introducing the Stop BEZOS Act, just in case there was any doubt regarding his aims. What annoys Sanders is that some Amazon employees qualify for welfare. Said Sanders, “We do not believe that taxpayers should have to expend huge sums of money subsidizing profitable corporations …” His answer? Force Amazon to pay its employees more.
But the hostility flowing from both sides of the American political divide hides something important: Americans love Amazon. There is a reason, after all, that it has become the second most valuable company in the world. And therein lies the rub.
Trump, Sanders, Amazon and consumers are all acting in response to different incentives. Amazon wants to make a profit for its shareholders. It does this by offering services that consumers want at prices they are willing to pay. Trump wants to curry favor with those who can help keep him in power. To the extent that the Washington Post makes that difficult for him, he’s happy to take out his displeasure on Bezos by making Amazonian life difficult. Sanders wants to grow his own political base and believes that attacking Amazon will raise his bona fides in the eyes of the working class. Consumers, for their part, want the convenience of products delivered to their door at low prices, not to mention video on demand content.
While Trump’s and Sanders’ interests conflict with Amazon’s, Amazon’s interests and consumers’ interests fit hand-in-glove. The evidence? Consumers voluntarily handed over to Amazon nearly $178 billion of their money in 2017, and will almost certainly hand over even more in 2018.
While it’s true that not everyone loves Amazon, people are always free to shop elsewhere. And many do. Workers who aren’t satisfied with Amazon’s wages are free to offer their labor elsewhere. And many do. In a free market, everyone is free to offer to do business with whomever they want. In the end, this is what sets Trump and Sanders apart from Amazon and the rest of us.
We can’t walk away from politicians. If politicians decide that Amazon is “too big,” then they will prohibit it from growing larger. If politicians decide that Amazon must pay its workers more, then they will require that it do so. Defenders will say that politicians merely convey the will of the people. But these defenders never answer the obvious question: Didn’t the market already convey the will of the people?
ABOUT THE WRITERS
Antony Davies is associate professor of economics at Duquesne University. James R. Harrigan teaches in the department of Political Economy and Moral Science at the University of Arizona. They host the weekly podcast Words & Numbers. They wrote this for InsideSources.com.
Explainer: is it really OK to eat food that’s fallen on the floor?
September 10, 2015
Professor of Food Science, Clemson University
Paul Dawson receives funding from USDA – Bi-national Agricultural Research and Development.
When you drop a piece of food on the floor, is it really OK to eat if you pick up within five seconds? This urban food myth contends that if food spends just a few seconds on the floor, dirt and germs won’t have much of a chance to contaminate it. Research in my lab has focused on how food and food contact surfaces become contaminated, and we’ve done some work on this particular piece of wisdom.
While the “five-second rule” might not seem like the most pressing issue for food scientists to get to the bottom of, it’s still worth investigating food myths like this one because they shape our beliefs about when food is safe to eat.
So is five seconds on the floor the critical threshold that separates an edible morsel from a case of food poisoning? It’s a bit a more complicated than that. It depends on just how much bacteria can make it from floor to food in a few seconds and just how dirty the floor is.
Where did the five-second rule come from?
Wondering if food is still OK to eat after it’s been dropped on the floor (or anywhere else) is a pretty common experience. And it’s probably not a new one either.
A well-known, but inaccurate, story about Julia Child may have contributed to this food myth. Some viewers of her cooking show, The French Chef, insist they saw Child drop lamb (or a chicken or a turkey, depending on the version of the tale) on the floor and pick it up, with the advice that if they were alone in the kitchen, their guests would never know.
In fact it was a potato pancake, and it fell on the stovetop, not on the floor. Child put it back in the pan, saying “But you can always pick it up and if you are alone in the kitchen, who is going to see?” But the mis-remembered story persists.
It’s harder to pin down the origins of the oft-quoted five-second rule, but a 2003 study reported that 70% of women and 56% of men surveyed were familiar with the five-second rule and that women were more likely than men to eat food that had been dropped on the floor.
So what does science tell us about what a few moments on the floor means for the safety of your food?
Five seconds is all it takes
The earliest research report on the five-second rule is attributed to Jillian Clarke, a high school student participating in a research apprenticeship at the University of Illinois. Clarke and her colleagues inoculated floor tiles with bacteria then placed food on the tiles for varying times.
They reported bacteria were transferred from the tile to gummy bears and cookies within five seconds, but didn’t report the specific amount of bacteria that made it from the tile to the food.
But how much bacteria actually transfer in five seconds?
In 2007, my lab at Clemson University published a study – the only peer-reviewed journal paper on this topic – in the Journal of Applied Microbiology. We wanted to know if the length of time food is in contact with a contaminated surface affected the rate of transfer of bacteria to the food.
To find out, we inoculated squares of tile, carpet or wood with Salmonella. Five minutes after that, we placed either bologna or bread on the surface for five, 30 or 60 seconds, and then measured the amount of bacteria transferred to the food. We repeated this exact protocol after the bacteria had been on the surface for two, four, eight and 24 hours.
We found that the amount of bacteria transferred to either kind of food didn’t depend much on how long the food was in contact with the contaminated surface – whether for a few seconds or for a whole minute. The overall amount of bacteria on the surface mattered more, and this decreased over time after the initial inoculation. It looks like what’s at issue is less how long your food languishes on the floor and much more how infested with bacteria that patch of floor happens to be.
We also found that the kind of surface made a difference as well. Carpets, for instance, seem to be slightly better places to drop your food than wood or tile. When carpet was inoculated with Salmonella, less than 1% of the bacteria were transferred. But when the food was in contact with tile or wood, 48%-70% of bacteria transferred.
Last year, a study from from Aston University in the UK used nearly identical parameters to our study and found similar results testing contact times of three and 30 seconds on similar surfaces. They also reported that 87% of people asked either would eat or have eaten food dropped on the floor.
Should you eat food that’s fallen on the floor?
From a food safety standpoint, if you have millions or more cells on a surface, 0.1% is still enough to make you sick. Also, certain types of bacteria are extremely virulent, and it takes only a small amount to make you sick. For example, 10 cells or less of an especially virulent strain of E. coli can cause severe illness and death in people with compromised immune systems. But the chance of these bacteria being on most surfaces is very low.
And it’s not just dropping food on the floor that can lead to bacterial contamination. Bacteria are carried by various “media,” which can include raw food, moist surfaces where bacteria has been left, our hands or skin and from coughing or sneezing.
Hands, foods and utensils can carry individual bacterial cells, colonies of cells or cells living in communities contained within a protective film that provide protection. These microscopic layers of deposits containing bacteria are known as biofilms and they are found on most surfaces and objects.
Biofilm communities can harbor bacteria longer and are very difficult to clean. Bacteria in these communities also have an enhanced resistance to sanitizers and antibiotics compared to bacteria living on their own.
So the next time you consider eating dropped food, the odds are in your favor that you can eat that morsel and not get sick. But in the rare chance that there is a microorganism that can make you sick on the exact spot where the food dropped, you can be fairly sure the bug is on the food you are about to put in your mouth.
Research (and common sense) tell us that the best thing to do is to keep your hands, utensils and other surfaces clean.
Sex and other myths about weight loss
June 28, 2016
Assistant Professor, Family Medicine, University of Michigan
Resident, Department of Family Medicine, University of Michigan
Tammy Chang receives funding from the National Institutes of Health.
Angie Wang does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
University of Michigan provides funding as a founding partner of The Conversation US.
The estimated annual health care costs related to obesity are over $210 billion, or nearly 21 percent of annual medical spending in the United States. Americans spend $60 billion on weight loss products each year, trying everything from expensive meal replacement products to do-it-yourself programs on the latest cell phone apps. We gather weight loss advice, voluntarily or involuntarily, from news outlets, social media and just about everyone.
Americans have known for 15 years that obesity is an epidemic; the surgeon general declared it so in 2001. Despite intense efforts to prevent and treat obesity, however, studies published June 7 in the Journal of the American Medical Association showed that 35 percent of men, 40 percent of women, and 17 percent of children and adolescents are obese. Even more worrisome, the rates continue to rise among women and adolescents.
In fact, experts predict that this generation of children may be the first in 200 years to have a shorter life expectancy than their parents, likely due to obesity.
So what is our society doing wrong? Clearly, what doctors and policy makers have been doing for the last 15 years to address this epidemic is not working.
Weight loss myths have broad appeal
An article from 2013 in the New England Journal of Medicine (NEJM) identified common myths surrounding obesity from popular media and scientific literature. The authors defined myths as ideas that are commonly held, but go against scientific data. Could these myths be keeping us from treating obesity effectively? As family physicians who treat overweight patients every day, we believe they do. Not only can these myths discourage people, they also provide misinformation that can prevent people from reaching their weight loss goals.
You might be surprised to hear some of these myths:
Myth 1: Small changes in your diet or exercise will lead to large, long-term weight changes.
Unfortunately, this is not true. In weight loss, two plus two may only equal three instead of four. Small changes simply do not add up since physiologically, your body tries to stay the same weight. This doesn’t mean that making small healthy choices don’t matter, because even small things you do to stay healthy matter. It just means you are not likely to meet your weight loss goals by just taking one less bite. It’s likely going to take bigger changes in your diet and exercise.
Myth 2: Setting realistic goals when you are trying to lose weight is important because otherwise you will feel frustrated and lose less weight.
Patients often come in with ambitious goals for weight loss, and we as family physicians nearly always say- go for it! (within safety and reason). There is no evidence that shooting for the stars leads to frustration. If anything, aiming for a larger goal may lead to better weight-loss outcomes.
Myth 3: Losing a lot of weight fast doesn’t keep weight off as well as losing a few pounds slowly.
Again, studies have shown that losing a larger amount of weight fast in the beginning (maybe while you are super motivated) has been associated with lower weight in the long-term. There just isn’t evidence to go “slow and steady” when it comes to weight loss.
Finally, to our favorite one:
Myth 4: Having sex one time burns about as many calories as walking a mile.
Sorry to disappoint, but for an average sexual encounter (lasting 6 minutes!), an average man in his 30s burns just 20 calories. And as the NEJM articles further explains, this is just 14 more calories than just sitting and watching TV. So if the thought went through your head that sex may be your exercise for the day, you should think again.
Myths take hold
As family physicians, we were curious to know if our own patients in clinic might believe in these myths. Maybe in the few short years since the NEJM paper was published, this information has permeated through popular media, and corrected itself. Everyone must know these basic facts about obesity, right?
To figure this out, we conducted a study of over 300 people in the waiting room of our diverse academic family medicine clinic. People who participated in our survey had an average age of 37, were mostly female (76 percent), had at least some college education (76 percent), and were a mix of non-Hispanic black (38 percent) and non-Hispanic white (47 percent).
The grand majority of people we surveyed still believed these myths (Myth 1: 85 percent, Myth 2: 94 percent, Myth 3: 85 percent, Myth 4: 61 percent)! Even more interestingly, there were no differences in what people believed across gender, age, or educational levels. These myths were pervasive.
How can we expect people to lose weight if most do not know the basics of weight loss? We didn’t need to go far before we realized that these myths are still found in popular media. In some cases, physicians themselves may fall victim to these myths.
Of course, healthcare providers should only give evidence-based advice to patients about weight loss in order to optimize their chance of success. Studies have shown that when primary care doctors provide advice on weight loss, patients are more likely to attempt to change their behaviors related to weight. However, even giving better and more advice may not be enough.
The first step is to acknowledge that patients are likely influenced by the myths that are so easily found online and among the advice given by friends and family. This means patients must be particularly savvy consumers of health information and to seek out information from reputable sources. This also means that educating and empowering overweight patients is only one part of the solution. Informing those – friends, family, and also the media – who influence overweight patients is also important if we want to change the trajectory of obesity in the U.S.
If we don’t translate the research on obesity into practice, we cannot expect this problem to improve in our lifetime. We will only have a chance if we use what we know about weight loss and drop these myths.