Blackstone Group agrees to buy 20% stake in Versace for $287 million

PARIS: Gianni Versace SpA, the Italian fashion house that features Lady Gaga in its latest advertising campaign, agreed to sell a 20% stake to Blackstone Group LP for €210 million ($287 million).

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

The deal marks the end of a lengthy search by Versace’s family owners to find an investor in the maker of $215 sunglasses and $5,925 bomber jackets after hiring Goldman Sachs Group and Banca IMI SpA in 2012. The fashion company, founded by the late Italian designer of the same name in 1978, said last year it plans to use the investment to fund growth before selling shares to the public in three to five years.

Sales should grow 10% or more a year through that period , chief executive officer Gian Giacomo Ferraris told Bloomberg News in September . In 2012, Versace reported earnings before interest, taxes , depreciation and amortisation of €44.5 million on revenue of €408.7 million.

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.

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. Blackstone, the world’s largest private-equity firm, also owns Jack Wolfskin, a German outdoor apparel specialist.