A key operation in the luxury sector

The Italian Fashion Group Prada is in advanced negotiations to acquire Versacethe luxury firm currently in the hands of the American conglomerate Capri Holdings. According to sources consulted by Bloomberg, The operation could be closed this month for a value close to 1,500 million eurosprovided that last minute obstacles arise.

If the purchase materializes, it would mean a strategic movement of great relevance in the luxury industry, since the acquisition of an Italian fashion house would occur by another transalpine, something rare in a sector dominated by the French giants LVMH and Keing, owners of brands such as Fendi and Gucci, respectively.

An attempt that repeats itself after the failure of 2018

This is not the first time that Prada shows interest in Versace. In 2018, when the Italian firm was sold to Capri Holdings for more than 1.8 billion euros, Prada evaluated the possibility of presenting an offer, but finally decided not to advance with the operation. On that occasion, it was the American group founded by Michael Kors who took control of the company, in a transaction that marked Versace’s departure from the Blackstone investment fund.

Now, six years later, Prada returns to load in a different, but equally competitive context. In recent months, there has been talk of other possible interested parties in the acquisition of Versace, including the Holding Exor, controlled by the Agnelli-Elkann family, and the Kering group, owner of Gucci, Balenciaga and Saint Laurent.

A strategic purchase for Prada

For Prada, the purchase of Versace would mean a qualitative and quantitative leap in its expansion strategy. The brand, founded by Miuccia Prada and Patrizio Bertelli, has managed to consolidate itself as one of the most influential fashion houses worldwide, but has always maintained a more independent structure than its rivals. With the acquisition of Versace, Prada would reinforce his presence in the luxury market and diversify his offer With a brand that has a unique aesthetic seal, characterized by its extravagance, vibrant colors and strong visual identity.

Versace, meanwhile, has experienced remarkable growth since its integration in Capri Holdings. Under the direction of Donatella Versace, the firm has managed to expand its presence in key markets such as Asia and North Americaincreasing its billing and consolidating its positioning as one of the most desired luxury brands. However, Capri Holdings’ situation as a whole is not so favorablewhat could have taken the American group to Consider the sale.

Capri Holdings, looking for liquidity after the purchase of Tapestry

Capri Holdings, who also owns Michael Kors and Jimmy Choo, has had an unequal performance in recent years. Although Versace has maintained an image of exclusivity and has managed to attract new customers, The group has faced difficulties in an increasingly dominated sector by European luxury giants.

In this context, the possible sale of Versace could respond to the need to reinforce the liquidity of Capri Holdings, especially after 2023 agreed to its fusion with Tapestry, the American company that owns Coach, Kate Spade and Stuart Weitzman. The merger, valued at 8,500 million dollars, seeks to create a strong conglomerate in the luxury fashion sector accessiblecapable of competing with LVMH and Keing.

However, the sale of Versace could be interpreted as a change in strategy, prioritizing the consolidation of its business in the affordable luxury segment, while it emerges from a brand that operates in the exclusive luxury sector, where synergies with Michael Kors and Jimmy Choo have been limited.

The impact on the luxury industry

If Prada manages to close the purchase of Versace, it would occur one of the most relevant movements in the luxury industry of recent years. The operation would reconfigure the panorama of the sector, giving rise to a new player with greater weight within the European market, which until now has been dominated by the French conglomerates.

In addition, it would be a return from Versace to Italian hands, after having been under American control since 2018. This could be seen with good eyes for the defenders of Made in Italy, who have criticized the growing influence of foreign groups in the most emblematic Italian brands.

On the other hand, A fusion between Prada and Versace would open new growth opportunities for both firmsallowing them to share resources, strengthen their supply chain and expand their international scope. However, it would also raise challenges, especially with regard to the integration of two brands with such marked and differentiated identities.

An imminent outcome

Although negotiations seem to be advanced, there is still the possibility that the operation does not come to specify. It is not ruled out that other interested buyers arise or that Prada finally decides not to present a firm offer.

In any case, Prada’s interest in Versace reflects the intense competition in the world of luxury and the importance of consolidation in an increasingly globalized market. If the sale was made, we would be before One of the most significant business movements in the sector in recent yearswith implications that go beyond the field of fashion.