Prada SpA is reportedly close to finalizing a deal to acquire Versace from Capri Holdings, which could reshape the luxury fashion landscape.
The luxury fashion company Prada SpA, headquartered in Milan, is reportedly close to finalizing a deal to acquire the iconic Italian fashion house Versace, which is currently owned by the American company Capri Holdings. The proposed purchase price is approximately 1.5 billion euros, or around 1.6 billion dollars, according to sources who spoke on the condition of anonymity to Bloomberg.
Negotiations between Prada and Capri are reportedly at an advanced stage, with the possibility of concluding the acquisition as soon as this month. Sources indicate that no significant risks were identified during the initial evaluation phase of the deal. However, they caution that the timing and details may still change, and there is no certainty that an agreement will ultimately materialize.
Capri Holdings, which purchased Versace in 2018 for about 1.8 billion euros, has not responded to requests for comment regarding the ongoing negotiations. Meanwhile, representatives from Prada have also declined to provide any remarks on the matter.
In market activity on Monday, Prada’s shares experienced a notable increase, rising by 4.1% on the Hong Kong Stock Exchange. The company’s market capitalization has reached approximately HKD 175 billion, which translates to around 22.5 billion dollars. For context, LVMH, a rival luxury conglomerate, holds a market capitalization of approximately 347.5 billion euros, or 362 billion dollars.
If the acquisition goes through, it would create a more formidable Italian competitor in the luxury market, positioning Prada to better challenge other global luxury groups, such as LVMH and Kering SA, which owns renowned brands like Yves Saint Laurent and Gucci. Analyst Susy Tibaldi from UBS AG remarked, “Prada is well-positioned to unlock the long-term potential of the Versace brand, potentially paving the way for the group to become Italy’s answer to luxury conglomerates in France.”
The financials of Versace have shown some challenges, with the fashion house reporting revenues of 193 million dollars in the third quarter of the fiscal year, reflecting a 15% decline compared to the same period last year. Additionally, operating losses for Versace increased to 21 million dollars, up from 14 million dollars the previous year.
In the broader context of the luxury market, prominent French conglomerate LVMH currently owns several Italian brands, including Fendi and Loro Piana. Moreover, L Catterton, a fund backed by LVMH, has been influential in various luxury deals, including a partnership with the footwear manufacturer Tod’s SpA. Kering SA, another major player, owns brands like Gucci and Bottega Veneta.
Prada has emerged as a strong performer in the luxury sector, even amid global fluctuations in demand for luxury goods. Its sales figures for the third quarter of 2024 showed an uptick, significantly driven by the success of the Miu Miu brand.
Source: Noah Wire Services
