Prada SpA, the Milan-based luxury fashion company, is reportedly considering a bid for fellow Italian fashion brand, Versace, which is currently under the ownership of Capri Holdings Ltd. The company is said to be working with advisers to assess the Versace brand, following a comprehensive review initiated after gaining access to Versace’s recent financial and sales data. It is being speculated that the review process is part of Prada’s evaluation for a potential bid.
In the current slowdown in the luxury sector, Prada has experienced growth in the luxury sector while other fashion houses have faced declining sales, especially due to decreased demand in China. Prada, a publicly traded company on the Hong Kong market, has seemingly avoided the sales decline affecting the rest of the industry. The group’s sales increased by 18% in the nine months ending September 30 compared to the previous year. As it evaluates Versace, the company continues to maintain its strong position within the industry. The potential acquisition of Versace could further strengthen Prada’s portfolio, should it make a formal offer after review. Capri shares increased by up to 4% on Wednesday morning. No confirmation has been received from Prada and Capri.
Like other luxury fashion brands, Versace has reported lower earnings over the past year impacted by the economic slowdown in China. The brand reported $193 million in revenue in the third quarter last year – a decrease of 15% from the previous year. In the same quarter, Versace disclosed a $21 million operating loss, up from $14 million in 2023.
If Prada decides to make an offer, a potential deal could see Versace, which was established by designer Gianni Versace in Milan, return to an Italian company.
Prada’s success is largely attributed to its Miu Miu brand, which more than doubled its sales in the third quarter — increasing by 105% from the prior year. The Miu Miu brand has gained popularity among young consumers. Its fashion designs have been worn on red carpets by popular young stars like Sabrina Carpenter and Sydney Sweeney. Actor Elle Fanning is the brand’s “Miu Miu girl” opening a Miu Miu fashion show and promoting its latest fragrance in a commercial.
Last year, Prada chief executive Andrea Guerra stated that the company plans to open more Miu Miu stores and expand its retail portfolio into new locations.
Capri, which also owns Michael Kors and Jimmy Choo, has hired Barclays Plc to explore options for some of its brands after an $8.5 billion merger with Tapestry collapsed, according to Italian media
