MILAN, Jan. 12 — Italy’s Prada is among potential suitors considering fashion group Versace, which is being put up for sale by parent company Capri Holdings, and has contacted Citi to evaluate bids. The company is cooperating with the government, a person familiar with the matter said. on friday.
US-listed Capri has suffered falling sales in the US$400 billion (RM1.8 trillion) global luxury goods sector, but confidence has been eroded by wealthy Chinese spending cuts and the end of a long boom. I am doing it.
In November, Coach owner Tapestry canceled an $8.5 billion deal to buy Capri, which also owns the Michael Kors and Jimmy Choo brands.
Capri executives did not rule out selling their brand after a deal to form a US luxury conglomerate fell through.
Capri hired Barclays to explore strategic options, including selling its Versace and Jimmy Choo brands, two people with direct knowledge of the matter told Reuters. One of the sources added that both a private equity firm and a rival luxury goods group were being considered as potential bidders.
One person said the entire Capri Holdings group could also be put up for sale.
Prada, Barclays and Citi declined to comment when contacted by Reuters. Capri Holdings could not be reached for comment.
Italy’s Il Sole 24 Ore first reported that Prada is considering a possible bid with City. The US bank has worked with Italian luxury brands on dual-listing projects in the past, but the deal was put on hold.
Reuters could not say whether Prada is still evaluating or interested in a potential bid for Versace.
U.S.-listed Capri shares were up about 6% as of 1520 GMT. Prada’s Hong Kong-listed shares closed 0.4% lower on Friday.
Bernstein analyst Luca Sorca said, “If you think about it positively, you could say that Versace and Prada cater to very different consumer groups,” even though Versace has a maximalist aesthetic. On the other hand, she added that Prada has a minimalist aesthetic.
Bernstein values Versace, excluding debt, at between US$1.75 billion and US$2.19 billion.
Founded in Milan in 1978 by the late Italian designer Gianni Versace and still led by his sister Donatella as creative director, Versace is known for its bold and luxurious prints, including the iconic Medusa motif. Now you can
Prada, whose rigorous, intelligent style bears the imprint of creative chief Miuccia Prada, continues to defy the industry’s downturn, with sales up 18% in constant currency in the third quarter.
“On the downside, Prada has a terrible history with mergers and acquisitions,” Solka said, citing Jil Sander and Helmut Lang as examples. Prada acquired the two labels in the late 1990s and sold them a few years later, with Prada’s owner labeling them “mistakes”.
The analyst said another challenge Prada needs to address is reorganizing its distribution by reducing its wholesale presence and retail outlets, as well as updating Versace’s aesthetic.
In the fiscal year ending March 30, 2024, Versace accounted for one-fifth of Capri’s sales. Versace’s sales fell to US$1.03 billion from US$1.1 billion in the same period last year, and its operating margin fell to 2.4% from 13.7%.
“We believe that the acquisition of Versace would be a difficult turnaround. We therefore believe that it is unlikely that Prada will have any real interest in Versace until further factors are determined,” the Italian brokerage said. It is doubtful whether the bid will materialize, said Equita analysts.
Prada CEO Andrea Guerra said in May that the group was not considering major acquisitions as it focused on the brands it already owned. — Reuters
