Handbag maker Michael Kors said Tuesday that it will buy famed Italian fashion house Gianni Versace for $2.1 billion, a move that will add an exclusive but aging luxury brand to its fold.

In a statement, Kors said it will change its name to Capri Holdings. Donatella Versace, 63, who has helped run the brand since the murder of her brother in 1997, will stay on as creative director as part of the deal.

The agreement is the latest effort in Kors’s effort to become a major fashion conglomerate, after it acquired Jimmy Choo, a British luxury footwear brand, for $1.2 billion in 2017. But in some ways, it’s an odd union: one of most exclusive names in luxury fashion being brought under the umbrella of a brand known for offering high-end items at affordable prices. Then again, it’s an odd moment in the luxury fashion.

That part of the market is on an upswing, with $289 billion in global sales last year, according to Bain & Company. But shifts in the landscape — driven by a younger, more digitally focused audience — are challenging some storied companies such as Versace to expand both geographically and demographically. As brands struggle to adapt, some, like Kors, are turning to the fashion conglomerate model to stay afloat amid such flux.

By 2025, millennials and Generation Z will make up nearly 40 percent of luxury goods consumers, according to Deloitte’s 2018 “Global powers of luxury goods” report, but these younger consumers are after something different when it comes to luxury. They’re more concerned about a personalized shopping experience and the values the products represent than they are with brands’ legacies, or the notion of “luxury” goods in general, said Pam Danziger, a market researcher who has spent her career studying affluent American consumers.

“They’re not drawn to the glitz and glamour of a brand like Versace: They’re looking for something altogether more meaningful and more values-based,” Danziger said.

The past year has seen Michael Kors and Coach (which re-branded as Tapestry after buying handbag company Kate Spade) move toward the conglomerate model in the mold of European luxury juggernauts such as LVMH Moët Hennessy Louis Vuitton and Kering (which boasts big-name brands such as Dior, Gucci, Yves Saint Laurent, Balenciaga and Alexander McQueen). For product-based brands, a well-run conglomerate offers a sort of salvation via greater resources, said Milton Pedraza, chief executive of the Luxury Institute, a marketing research firm in New York. But it’s successful only if the conglomerate upholds the brands’ integrity.

“Part of the secret is knowing what to leverage across brands and knowing what to leave alone,” Pedraza said. “ Versace is one of the brands that has a real iconic look. It’s unmistakable, and that needs to be nurtured.”

But some, like Danziger, doubt that these brands can stay relevant when managed by conglomerates, which are often focused on profits over brand identity.

“These luxury brands became great by being controlled by visionaries, not by what they were racking up monthly in sales,” Danziger said.

Since the murder of founder Gianni Versace, the Italian fashion house has been helmed by the designer’s sister Donatella. Long known for its boldness — eclectic prints, bright colors, an arresting Medusa logo — Versace has struggled to adapt. After Blackstone Group, a private equity firm, bought a 20 percent stake in Versace in 2014, Versace courted a public offering, but it never manifested.

With its classic sportswear and handbags, Michael Kors has offered personal luxury goods to the masses at a relatively accessible price. The company was criticized for resorting to discounts to move its products in major department stores and outlet malls. Still, the company has kept up with the push toward digital distribution, with the biggest online marketshare of any luxury brand in 2018, according to a study from PMX Agency in New York. Kors shares dropped about 8 percent Monday after news of the pending deal spread.

Spokesman from both Versace and Michael Kors did not respond to requests for comment before the deal was announced.

In a statement Monday, Donatella Versace said: “This is a very exciting moment for Versace. It has been more than 20 years since I took over the company along with my brother Santo and daughter Allegra. I am proud that Versace remains very strong in both fashion and modern culture."

Added John D. Idol, chief executive of Michael Kors, in the statement: “The acquisition of Versace is an important milestone for our group. With the full resources of our group, we believe that Versace will grow to over US$2.0 billion in revenues. 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.”

Gianni Versace recognized the strength of elevating his brand through supermodels such as Cindy Crawford and Naomi Campbell, and modern-day Versace has harnessed young models such as Gigi Hadid and Karlie Kloss to connect with younger audiences (both were part of Versace’s fall 2016 campaign). Versace boasts more than 14 million Instagram followers — perhaps the most influential social media platform for luxury brands.

But Versace’s expansion under Kors might hinge on it becoming more of a “Monday through Friday” brand, Pedraza said, which is a difficult ask for a brand that has made its name on exclusivity and has not successfully courted younger consumers. And although Kors is known for its accessibility, some analysts doubt that it is capable of reining in Versace effectively.

“Some of the work required on Versace, which includes toning down some of the brasher elements of the brand which are now out of step with the more subtle tone preferred by modern consumers, are precisely the issues with which Michael Kors has struggled and is yet to satisfactorily resolve,” said Neil Saunders, managing director of GlobalData Retail.