The luxurious trend trade might quickly witness a monumental shift because the Prada Group positions itself to amass Versace. As reported by Reuters, Capri Holdings — the father or mother firm of Versace, Michael Kors, and Jimmy Choo — is contemplating the sale of its manufacturers. Among the many events, the Prada Group — with Citi as its advisor — has reportedly proven important curiosity in buying Versace. Such a transfer may additional bolster the worldwide standing of the “Made in Italy” legacy inside the luxurious sector.
Capri Holdings — a conglomerate that has confronted well-documented monetary struggles — had initially put the model, together with Jimmy Choo, available on the market in December 2024 following the collapse of a USD 8.5 billion proposed merger with Tapestry. As a model, Versace is synonymous with opulence, extravagance, and a frisson of daring method to design — embodying luxurious as a standing image. Prada alternatively, is introspective and complex — defining luxurious as a press release of refinement and understated class. Each manufacturers occupy distinct areas within the trend, interesting to vastly totally different sensibilities.
In 2023, when luxurious American firm Tapestry introduced its intention to amass Capri Holdings in a bid to compete with European luxurious conglomerates, Tapestry CEO Joanne Crevoiserat said, “The mix of Coach, Kate Spade, and Stuart Weitzman, together with Versace, Jimmy Choo, and Michael Kors, creates a robust new international luxurious home.” Capri Chairman and CEO John Idol responded, saying, “By becoming a member of forces with Tapestry, we are going to achieve higher sources and capabilities to speed up the enlargement of our international attain whereas preserving the distinctive DNA of our manufacturers”.
May the Prada Group be eager on the same path?
What Prada Stands to Acquire:
Versace’s distinctively daring aesthetic contrasts sharply with Prada’s popularity for understated class. This acquisition would enable Prada to faucet into a special phase of the posh market, interesting to shoppers drawn to glamour and maximalism. Moreover, Versace’s robust presence in North America— a area the place Prada has historically had a extra subdued affect — presents quick alternatives for progress and market penetration. In accordance with Bain & Firm, North America accounted for roughly 34 p.c of worldwide luxurious gross sales in 2024. A possible acquisition may considerably strengthen Prada’s foothold out there.
Subsequent, few manufacturers rival Versace on the subject of its affiliation with Hollywood and popular culture symbols. One may argue this goes again to 1994 when the late Gianni Versace famously loaned the “Versace pin costume” to the then comparatively unknown Elizabeth Hurley to the premiere of 4 Weddings and a Funeral. The costume would go on to be thought-about some of the recognisable trend moments in historical past, considerably elevating Hurley’s public profile.
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One can be amiss to not point out Jennifer Lopez’s extremely publicised Versace inexperienced jungle-print costume, worn to the 2000 Grammy Awards. The affect of this noticed the daring look turn into so extensively searched that Google realised the necessity for an image-specific search engine (thus the start of Google Pictures) and strengthened Versace’s popularity for creating daring designs that commemorate sensuality and set a precedent for the model’s technique of creating headlines with assertion items on high-profile celebrities.
Most just lately, Donatella Versace collaborated with singer Dua Lipa to unveil their co-designed girls’s assortment at Versace’s Excessive Summer season “La Vacanza” see-now-buy-now trend present on the French Riviera in 2023. In recent times, Prada has additionally embraced movie star muses, with Prada’s Autumn/Winter 2022 menswear assortment that includes notable actors equivalent to Thomas Brodie-Sangster, Louis Partridge, Kyle MacLachlan, and Jeff Goldblum.
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Why Now?
In relation to income, Jing Day by day experiences that Versace skilled a pointy decline, recording USD 201 million in income for the second quarter of the 2025 fiscal yr ending 28 September — a 28.2 p.c drop in comparison with the identical interval the earlier yr. In distinction, Jimmy Choo — one other luxurious model below Capri Holdings — reported a income improve, reaching USD 140 million. This stark disparity highlights Versace’s challenges, making its monetary struggles extra pronounced inside the Capri portfolio.
Prada posted double-digit progress, reaching EUR 3.829 billion within the first 9 months of 2024. With prestigious manufacturers equivalent to Prada and Miu Miu, the Milan-based group may strengthen its portfolio with the addition of such an iconic home as Versace. Versace, in the meantime, is struggling a big drop in gross sales, recording a 28.2 p.c fall within the second quarter of 2024. This example weakens Capri Holdings, already confronted with the failure of a merger with the American group Tapestry, valued at roughly EUR 8.24 billion.
Why, in a time of financial uncertainty, would Prada contemplate buying Versace? The reply may lie in strategic economics — when markets are down, alternatives to speculate at a decrease value usually come up. Capri Holdings has struggled to take care of profitability, significantly with Versace. This precarious monetary state presents a well timed alternative for Prada to barter beneficial phrases for the acquisition. The present financial atmosphere — marked by lowered valuations throughout industries — additional “sweetens” the deal.
Subsequent, the posh sector has seen growing consolidation, with bigger gamers buying smaller however famend manufacturers to consolidate market energy. Prada’s transfer could possibly be each defensive and strategic, making certain it stays aggressive towards conglomerates like LVMH and Kering. That is the place the importance of the aforementioned “Made in Italy” legacy is available in, to protect and champion Italian craftsmanship and heritage towards the French conglomerates giants of LVMH and Kering.
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In relation to potential pitfalls, sustaining Versace’s daring id whereas aligning it with Prada’s values would require cautious balancing. With international inflation and a possible downturn, luxurious spending may contract, making this a dangerous time for important capital investments. Reviving Versace’s profitability might necessitate operational restructuring, which may face resistance from present stakeholders.
All That Glitters…
On the flipside, right here is why the potential acquisition could possibly be rumour. Prada has traditionally been cautious about overextending itself via acquisitions, focusing as an alternative on natural progress and nurturing its present manufacturers. As reported by Reuters in October 2024, Miu Miu exceeded Prada Group’s expectations, contributing one-quarter of the group’s whole retail gross sales. All year long, the Prada Group achieved robust, high-quality progress, mirrored in constructive income and margin positive factors. For the primary 9 months, revenues reached had reached roughly EUR 3.8 billion. Final yr as the posh trend trade skilled numerous gross sales slumps, Prada noticed revenues rise by 16 p.c, the results of a rise in Miu Miu gross sales and continued progress in Asia with a lift in gross sales coming from China and Japan.
The corporate’s current monetary success — posting double-digit progress in 2024 — might point out that it’s well-positioned to behave, however it additionally raises the query: why tackle the dangers of buying a struggling model like Versace when Prada is flourishing independently? Moreover, no official affirmation or public assertion has been made by both Capri Holdings or Prada, leaving room for hypothesis and trade gossip to amplify unverified rumours.
Learn Extra: Luxurious American Firm Tapestry to Purchase Capri Holdings in a Bid to Rival European Luxurious Conglomerates
Apparently, such rumours would possibly work in Prada’s favour by holding the model within the highlight and reinforcing its standing as a severe contender within the luxurious sector’s consolidation race. By being linked to a high-profile potential acquisition, Prada indicators its ambition and monetary energy to opponents and buyers alike, even when no deal materialises. This strategic notion play ensures that Prada stays a focus in discussions about the way forward for the posh market.
Prada’s potential acquisition of Versace indicators a daring ambition to reshape the posh trend panorama. Whereas the timing could seem precarious, it may be the right second to grab an iconic model at a strategic inflexion level. For Prada, that is greater than a enterprise transaction — it’s a assertion of intent to redefine luxurious for a brand new period. The query stays: will Prada reach harmonising two distinct but complementary legacies to create a powerhouse for the long run? Solely time will inform.
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