Fashion conglomerate Prada in talks to acquire Versace
Versace's Future Unveiled: The Prada Takeover
Gossips swirl around the luxury fashion sphere as discussions about the Prada Group's potential acquisition of Versace heat up. Other contenders, such as Exor (the Agnelli-Elkann family's holding company) and Kering, are also reportedly vying for a piece of the action.
Since 2018, Versace has been part of Capri Holdings, with the acquisition valued at around €1.83 billion. In 2024, word leaked that Capri might be ready to let go of Versace, along with luxury shoe brand Jimmy Choo, according to Il Sole 24 Ore. The proposals were made through bank Barclays.
The looming question, however, remains the valuation of Versace due to a downturn in the luxury market. In 2023, Versace's revenue surpassed $1.1 billion, but the expansion slowed down thanks to a decrease in global demand, particularly in China. This certainly had an impact, as in Q2 2024, Versace's profits took a 28.2% hit, falling to $201 million, with operating losses of $3 million.
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Insights:
- Prada is all set to take over Milan-based fashion house Versace, with the deal valued at approximately $1.4 billion. The acquisition is expected to close in the second half of 2025.
- The deal sees Prada adding the bold Greco and Medusa brand to their portfolio, with the financing coming from 1.5 billion euros in new debt.
- Versace's recent financial performance, including revenues of around $1.03 billion and a relatively modest profit margin, may have contributed to the decision to sell amid the luxury market slowdown.
- Prada sees potential for growth in the Versace brand and aims to revive its business performance by leveraging its retail execution and operational expertise.
- The acquisition signifies a return of Versace to Italian ownership, which carries strategic significance in the luxury fashion industry.
- The Prada Group's acquisition of Versace is expected to be finalized in the second half of 2025, valued at approximately $1.4 billion.
- To finance this acquisition, Prada has secured 1.5 billion euros in new debt.
- Amidst a luxury market slowdown, the decision to sell may have been influenced by Versace's recent financial performance, with revenues of around $1.03 billion and a relatively modest profit margin.
- Prada aims to revive Versace's business performance by leveraging its retail execution and operational expertise.
- With this acquisition, Versace will return to Italian ownership, bringing strategic significance in the luxury fashion industry.
