In a significant development within the luxury fashion industry, Prada is reportedly nearing an agreement to acquire Versace from Capri Holdings for approximately €1.5 billion ($1.6 billion). This potential acquisition would unite two of Italy’s most iconic fashion houses, enhancing Prada’s position in the global luxury market.
Background of the Deal
Capri Holdings, formerly known as Michael Kors Holdings, acquired Versace in 2018 for about €1.8 billion. Despite initial optimism, Versace has faced challenges under Capri’s ownership, including a 15% decline in revenue in the last quarter of 2024.Â
Negotiations between Prada and Capri Holdings have been ongoing for several months, with the initial asking price reportedly around €3 billion. The two parties have now agreed upon a valuation close to €1.5 billion, with the deal potentially concluding within the coming weeks.Â
Strategic Implications for Prada
Acquiring Versace would significantly bolster Prada’s portfolio, allowing it to compete more effectively with luxury conglomerates like LVMH and Kering. Prada’s minimalist aesthetic contrasts with Versace’s bold and opulent designs, offering the potential for a diverse and complementary brand lineup.Â
Market Reactions
The news of the potential acquisition has positively impacted both companies’ stock performances. Capri Holdings’ shares surged by approximately 7% following the reports, while Prada’s stock experienced a 3.5% increase in Hong Kong trading.Â
The prospective acquisition of Versace by Prada represents a pivotal moment in the luxury fashion sector, potentially bringing Versace back under Italian ownership and strengthening Prada’s competitive stance. As discussions progress, the fashion industry keenly awaits the final outcome of this landmark deal.
