In the face of a challenging luxury market, Prada is exploring the opportunity to acquire the iconic Versace brand, recently put up for sale by Capri Holdings. This move comes as the latter grapples with a significant decline in sales, particularly in key markets like China.
The Italian luxury group Prada is one of the key players currently exploring the opportunity to acquire the Versace brand, recently put up for sale by its American owner, Capri Holdings. This decision comes at a delicate time for the luxury industry, especially in the face of a slowdown in demand. According to the economic daily Il Sole 24 Ore, Capri Holdings, which also owns Michael Kors, has tasked Barclays with probing potential buyers for the renowned Italian fashion house.
Although Prada has not responded to AFP's inquiry, Il Sole 24 Ore specifies that the Milan-based house has engaged Citi, an American investment bank, to assess the opportunity to acquire Versace. Other fashion groups, as well as investment funds, are also reportedly interested in acquiring this iconic label, highlighting the strategic appeal of Versace in the global luxury landscape.
Sales Decline
Capri Holdings' financial difficulties seem to be driving this sale. The group reported a 16.4% drop in its revenue, falling to $1.08 billion in the second quarter of fiscal 2025, which ended in September 2024. This decline is largely attributed to reduced demand for luxury goods, especially in China, a crucial market for major brands.
Versace was particularly affected, with a 28.2% drop in its revenues, which amounted to only $201 million, and an operating loss of $3 million. This financial situation prompted Capri to consider selling several of its brands, including Versace, as well as the shoe brand Jimmy Choo.
An Icon of Italian Fashion
Acquired in 2018 for €1.83 billion, Versace was partly owned by the American fund BlackRock (with a 20% stake), with the remainder held by the Versace family. The Prada group had shown interest in the brand at that time but ultimately decided to withdraw, according to Il Sole 24 Ore.
Founded in 1978 by designer Gianni Versace, the brand is an icon of Italian fashion, famous for its sensual and bold collections. Today, under the leadership of his sister Donatella, the house remains a key player in global luxury, despite the current challenges.
As for Prada, it appears to be better positioned in the face of industry difficulties. The group has reported an 18% growth in constant currency terms for the first nine months of 2024, driven by strong demand, particularly in Asia.
This announcement comes within a broader context of tensions in the luxury industry, following the collapse of a proposed merger between Capri Holdings and Tapestry (Coach, Kate Spade, Stuart Weitzman). The $8.5 billion acquisition project was abandoned in November 2024 after the deal was blocked by a court ruling.
With AFP
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