The posh trend business could quickly witness a monumental shift because the Prada Group positions itself to amass Versace. As reported by Reuters, Capri Holdings — the dad or mum 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 strategy to design — embodying luxurious as a standing image. Prada however, is introspective and complex — defining luxurious as an announcement 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 mixture 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’ll achieve better assets 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 course?
What Prada Stands to Achieve:
Versace’s distinctively daring aesthetic contrasts sharply with Prada’s status for understated class. This acquisition would permit Prada to faucet into a distinct section of the luxurious market, interesting to shoppers drawn to glamour and maximalism. Moreover, Versace’s sturdy presence in North America— a area the place Prada has historically had a extra subdued affect — presents rapid alternatives for progress and market penetration. Based on Bain & Firm, North America accounted for about 34 p.c of worldwide luxurious gross sales in 2024. A possible acquisition may considerably strengthen Prada’s foothold available in the market.
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 gown” to the then comparatively unknown Elizabeth Hurley to the premiere of 4 Weddings and a Funeral. The gown would go on to be thought-about probably the most 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 gown, worn to the 2000 Grammy Awards. The influence of this noticed the daring look change into so broadly searched that Google realised the necessity for an image-specific search engine (thus the beginning of Google Pictures) and strengthened Versace’s status 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 not too long ago, Donatella Versace collaborated with singer Dua Lipa to unveil their co-designed ladies’s assortment at Versace’s Excessive Summer time “La Vacanza” see-now-buy-now trend present on the French Riviera in 2023. Lately, Prada has additionally embraced superstar muses, with Prada’s Autumn/Winter 2022 menswear assortment that includes notable actors akin to Thomas Brodie-Sangster, Louis Partridge, Kyle MacLachlan, and Jeff Goldblum.
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Why Now?
On the subject of income, Jing Day by day reviews 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 beneath 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 akin 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 major drop in gross sales, recording a 28.2 p.c fall within the second quarter of 2024. This case 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 take a position at a decrease value typically come up. Capri Holdings has struggled to keep up profitability, notably with Versace. This precarious monetary state presents a well timed alternative for Prada to barter beneficial phrases for the acquisition. The present financial setting — marked by lowered valuations throughout industries — additional “sweetens” the deal.
Subsequent, the luxurious sector has seen growing consolidation, with bigger gamers buying smaller however famend manufacturers to consolidate market energy. Prada’s transfer may very well be each defensive and strategic, making certain it stays aggressive in opposition to 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 in opposition to the French conglomerates giants of LVMH and Kering.
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On the subject of potential pitfalls, sustaining Versace’s daring identification 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 could necessitate operational restructuring, which may face resistance from present stakeholders.
All That Glitters…
On the flipside, right here is why the potential acquisition may very well be rumour. Prada has traditionally been cautious about overextending itself by 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 sturdy, high-quality progress, mirrored in constructive income and margin good points. For the primary 9 months, revenues reached had reached roughly EUR 3.8 billion. Final yr as the luxurious trend business 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 — could point out that it’s well-positioned to behave, but it surely 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 business gossip to amplify unverified rumours.
Learn Extra: Luxurious American Firm Tapestry to Purchase Capri Holdings in a Bid to Rival European Luxurious Conglomerates
Curiously, such rumours may 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 alerts 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 luxurious market.
Prada’s potential acquisition of Versace alerts a daring ambition to reshape the luxurious 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 longer term? Solely time will inform.
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