Prada is approaching an agreement to acquire Capri Holdings Versace, after agreeing with a price of almost € 1.5 billion ($ 9.1 billion), according to sources close to the matter.
The company based in Milan and Capri can finalize an agreement for the Italian luxury brand later this month, the sources said, which asked not to be identified due to the private nature of the discussions. Negotiations are advancing after the initial Due Diligence did not find risks, they added.
The schedule and evaluation may change, and discussions may not yet materialize, the sources warned. Capri, which bought Versace in 2018 for about € 1.8 billion, did not immediately respond to requests for comment on Sunday (2). Prada refrained from commenting.
A possible acquisition of the fashion house founded by 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.
The purchase would mark a reversal of the trend in Italian fashion, after decades in which domestic luxury groups – including Gucci and Valentino – were acquired by foreign rivals.
Prada stood out as one of the winners of the luxury sector amid a global slowdown of high standard fashion items. Its sales fired in the third quarter of last year, driven by the Miu Miu brand, popular with younger consumers.
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The Italian company spent weeks evaluating Versace with its consultants and obtained exclusive access to the latest financial and sales figures of the brand, said the Bloomberg News In February, citing sources familiar with the situation.
Even with an agreement, Prada will still represent a fraction of its biggest competitors. The fashion house listed in Hong Kong has a market capitalization of about HK $ 169.4 billion (R $ 113.55 billion), after a 10% increase in shares since the beginning of the year. The family of Miuccia Prada and her husband, Patrizio Bertelli, control about 80% of the company.
French conglomerate LVMH, which has Louis Vuitton and Christian Dior, as well as a series of Italian brands, including Fendi and Loro Pianna, has a market value of € 347.5 billion. Last year, LVMH acquired a participation in the company that controls Moncler, Italian designer clothing manufacturer.
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Versace reported revenue of $ 193 million in the third quarter of the current fiscal year, a 15% drop from the previous year, according to a statement. In the same period, the brand’s operational loss increased to $ 21 million, compared to US $ 14 million.
Capri, which also has Michael Kors, hired Barclays to explore options for some of its portfolio companies after a merger of $ 8.5 billion with Tapepetry was canceled after a court order. Capri’s debt was relegated to below the investment degree by S&P Global Ratings in February.
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