Prada nears deal to acquire Versace from Capri

Prada is reportedly moving closer to a deal to buy Versace from Capri Holdings Ltd. for nearly £1.2 billion (€1.5 billion).

The Milan-based company and Capri, which bought Versace in 2018 for about £1.49 billion (€1.8 billion), could finalise a deal for the Italian luxury fashion house this month, sources told Bloomberg. Talks are in progress after initial due diligence didn’t find any risks, the people said; however, the deal could still fall apart.

Prada is amongst bidders including Bahraini investment firm Investcorp, private equity group Permira and ex-Gucci CEO Marco Bizzarri. Ferrari owner Exor was also said to have expressed interest but is believed to have stepped back from the process.

In 2023, Tapestry Inc. announced it would acquire rival American fashion conglomerate Capri in a deal valued at £6.6 billion ($8.5 billion). This deal would have married America's two largest luxury houses. Fast forward to 2024: a federal judge blocked the merger following a court order.

As a result, Capri, which owns Michael Kors, Versace and Jimmy Choo, hired Barclays Plc to explore options for Versace and Jimmy Choo.

Acquiring Gianni Versace's legacy brand would allow Prada to create a larger Italian player to compete with the likes of LVMH and Kering.

Prada has defied the luxury downturn in recent months. For the third quarter of 2024, it reported a 15% increase in net revenue, bucking the luxury slowdown trend that has hit LVMH and Kering.

Capri, however, was hit by the luxury slump. Revenues were down by 16.4% to £830 million ($1.08 billion) in the second quarter of Fiscal 2025.

Prada had spent weeks evaluating Versace with its advisers and had gained exclusive access to its latest financial and sales figures.

Even with a deal, Prada would still be worth a fraction of its competitors. The Hong Kong-listed fashion house is worth HK$169.4 billion  £17.2 billion ($21.8 billion), compared to LVMH, which has a market value of £287 billion (€347.5 billion).