Prada to buy rival fashion house Versace in $ 2.2 billion deal

Prada Group has announced a deal to buy Versace from the American luxury group Capri Holdings under certain conditions that appreciate the fashion house at 1.25 billion euros ($ 2.2 billion).

The deal brings one of the most famous Italian labels of fashion back under Italian control after it was sold to Capri Holdings, then known as Michael Kors, for $ US2.15 billion ($ 3.4 billion) including debts in 2018.

Prada said that the addition of Versace’s “very recognizable aesthetics is a strong additional addition” to his portfolio, including the Prada and Miu Miu modem brands.

It said that the Versace established in Milan offered ‘considerably untouched growth potential’. ” ‘

The final value of the deal will be adjusted with closure, which is expected in the second half of the year.

It will be financed by 1.5 billion euros in new debt and has been approved by the Prada and Capri Holdings Board of Directors.

“Versace will maintain his creative DNA and cultural authenticity, while benefiting from the full strength of the significant consolidated platform of the group, including industrial possibilities, implementation of retail and operational expertise,” Prada said in a statement.

Versace, founded in 1978 by the late Gianni Versace, has been owned by Capri Holdings since 2018, including Michael Kors and Jimmy Choo.

Capri Holdings paid $ US2 billion for Versace, but had had a hard time in the recent era of “Silent Luxury”.

Last month Capri Holdings called Dario Vitale as creative director to replace Donatella Versace, who took on the role after the murder of her brother in 1997.

Versace received the new role of Chief Brand Ambassador in the Shake-Up, which was generally seen as determining the scene for the long-term Prada sale.

Deal revives Hope for the Italian luxury competition

The deal has revived the hope of a ‘made in Italy’ luxury champion after many other family -oriented brands have ended up in French, Swiss or American hands, and come because many Italian groups perform better than the wrestling sector.

Although Italy is good for 50 to 55 percent of the worldwide production of personal luxury goods, according to the estimates of Consultancy Bain, the country misses a group with a bowl that corresponds to French players such as LVMH Moët Hennessy Louis Vuitton SE and Gucci owner Kering.

Prada based in Milan, controlled by designer Miuccia Prada and husband Patrizio Bertelli and mentioned in Hong Kong with a market capitalization of around 14 billion euros, is the largest Italian luxury fashion group through income.

But the group, which also includes the fast-growing MIU MIU label, has been a relative Minnow in terms of stock market rating compared to LVMH, such as Louis Vuitton owner.

The Versace deal comes after Andrea Guerra de CEO of Prada became in 2023 to bridge a change in generation, with Lorenzo Bertelli, the son of the most important owners of the company and the Chief Marketing Officer, considered the heir.

“The ambition of Prada to become a leading Italian luxury conglomerate is an important step in a market dominated by French groups,” said Achim Berg, fashion and luxury industry advisor.

The combined income of the five largest listed luxury luxury groups in Italian property, still far below the approximately 17 billion euros of Kering, even after a large fall in revenue of the French group last year.

AP/Reuters