Prada is reportedly nearing a deal to acquire Versace for EU€1.5 billion (A$2.5 billion), which would unite the two luxury fashion brands during a slump for much of the industry.
Versace has been owned by Capri Holdings since 2018, and has seen a major slowdown in revenue in recent months.
Capri aimed to merge with Coach and Kate Spade owner Tapestry last year, though this was halted by a United States judge. “Given our Company’s performance over the past 18 months, we have recently started to implement a number of strategic initiatives to return our luxury houses to growth,” Capri CEO John D. Idol said in November.
Prada hopes to finalise a deal this month, according to Bloomberg. While Capri’s first asking price for Versace was EU€3 billion, the companies have now agreed to a price of around €1.5 billion.
Prada has been working with Citi to evaluate a bid for Versace since January. It secured exclusive access to review Versace’s financial data last month ahead of a potential sale.
Versace’s revenue last quarter fell by 15% year-over-year to US$193 million, posting declines in markets worldwide. The company saw an operating loss of $21 million.
Capri Holdings’ overall revenue sank by 11.6% year-over-year last quarter, and reported a net loss of US$547 million. Its net inventory also fell by 13%.
Capri originally bought Versace for EU€1.85 billion. It owns brands like Jimmy Choo, which it has also reportedly explored selling, and Michael Kors.
The luxury fashion market saw a significant slowdown in 2024, with brands like LVMH and Kering posting year-over-year slumps in revenue. This is partly due to weaker economies in East Asia, escalating prices in the sector, and low-cost duplicates flooding the market.
Prada has bucked the trend, however, reporting a 17.7% jump in revenue and a 1.7% rise in retail sales in 2024’s third quarter. Its full-year results are due this week.
Capri’s (NYSE: CPRI) share price closed at US$21.98, up from its previous close at $21.72. Its market capitalisation is $2.59 billion.
Prada’s (SEHK: 1913) share price closed at HK$66.20, down from its previous close at $68.00. Its market capitalisation is $169.39 billion.
Related content
