Michael Kors buying Versace for $2.1 billion

Michael Kors on Tuesday confirmed it has agreed to buy control of Italian fashion house Versace for $2.12 billion, and that it will rename the combined company Capri Holdings. Donatella Versace will continue to lead the label.

Why it's a big deal: Not only is Kors moving from "affordable luxury" into full-on luxury, but this is also a U.S. company daring to play in a part of the European fashion market that is relatively unaccustomed to outsiders.

Go deeper with CNBC's Lauren Hirsch:

"The push further into luxury serves also as a defense for the next economic downturn, more than a decade after the last one in the U.S. Those that can afford a Versace dress are among the most likely to continue to spend during a recession than those who shop more affordably, industry experts say."