Prada said to move closer to Versace deal for up to 1.5 billion euros
PRADA is moving closer to a deal to buy Versace from Capri Holdings after agreeing to a price of nearly 1.5 billion euros (S$2.1 billion), according to sources familiar with the matter.
The Milan-based company and Capri could finalize a deal for the Italian luxury clothier this month, said the sources, asking not to be identified because discussions are private. Talks are progressing after initial due diligence did not find any risks, the sources said.
The timing and valuation could change and discussions could still fall apart, the sources added. Capri, which bought Versace in 2018 for about 1.8 billion euros, did not immediately respond to requests for comment on Sunday (Mar 2). Prada declined to comment.
A potential acquisition of the fashion house founded by the late designer Gianni Versace in 1978 would allow Prada to create a larger Italian player to better compete with global luxury groups such as LVMH and Kering.
A purchase would mark a reversal of the trend in Italian fashion after decades during which domestic luxury groups – including Gucci and Valentino – were bought by foreign rivals.
Prada emerged as one of the luxury sector’s winners amid a global downturn for high-end fashion items. Its sales surged in the third quarter of last year on the back of its Miu Miu brand, a label popular with younger consumers.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The Italian company had spent weeks evaluating Versace with its advisers, and had gained exclusive access to its latest financial and sales figures, Bloomberg News reported in February, citing sources familiar with the situation.
Even with a deal, Prada will be worth a fraction of its biggest competitors. The Hong Kong-listed fashion house has a market capitalization of about HK$169.4 billion (S$29.4 billion), following a 10 per cent share gain since the start of the year. Miuccia Prada’s family and her husband Patrizio Bertelli control about 80 per cent of the company.
French conglomerate LVMH, which owns Louis Vuitton and Christian Dior as well as a string of Italian brands including Fendi and Loro Piana, has a market value of 347.5 billion euros. Last year, LVMH bought a stake in the company that controls Moncler, an Italian maker of designer outerwear.
Versace reported revenue of US$193 million for the third quarter of the current fiscal year, a 15 per cent year-on-year decline, according to a statement. Over the same period, the brand’s operating loss widened to US$21 million for US$14 million.
Capri, which also owns Michael Kors, hired Barclays to explore options for some of its portfolio companies after a US$8.5 billion combination with Tapestry was scrapped following a court order. Capri’s debt was downgraded to below investment grade by S&P Global Ratings in February. BLOOMBERG
Share with us your feedback on BT's products and services
