Prada has reached an agreement to acquire Versace from Capri Holdings for $1.375 billion, inclusive of debt.
This agreement merges two leading Italian fashion brands.
Prada is growing, maintaining its strength even as luxury sales have slowed down. Conversely, Versace has reported losses in the past few quarters.
This move enhances Italy's role in a luxury market typically controlled by French conglomerates such as LVMH, which owns Louis Vuitton.
The agreement follows closely after Donatella Versace revealed on March 13 that she would be resigning from her role as the chief creative officer at the company established by her brother, Gianni.
Related Five emerging Nigerian fashion brands to watch in 2025 Find High-Quality Boutique Fashion at Wholesale Prices Chidimma Adetshina reflects on individuality as she turns 24We strive to uphold Versace's heritage by honoring and revisiting its daring and enduring style.
" simultaneously, we will offer it a robust foundation, bolstered by continuous investments over many years and grounded in long-standing relationships," stated Patrizio Bertelli, the chairman of Prada.
Bertelli and his spouse, designer Miuccia Prada, hold the majority of shares.
Donatella Versace embraced the agreement, stating, "Gianni and I have consistently held great respect for Miuccia, Patrizio, and their entire family."
I feel privileged to have the brand under the care of such a reliable Italian family business, and I am eager to assist in whatever manner possible as the brand embarks on this new chapter.
The acquisition cost for Prada is less than the $2.15 billion that Michael Kors (which is now part of Capri Holdings) paid back in 2018. Prior to recent market volatility, media estimates anticipated a valuation closer to approximately $1.7 billion.
"This deal underscores our dedication to boosting shareholder value, reinforcing our financial position, and fueling the future expansion of Michael Kors and Jimmy Choo," stated John Idol, CEO of Capri.
After the announcement, Capri's stock price fell by 3%, and it has decreased by 24% for the year so far.
Versace’s bold, baroque fashion contrasts with Prada’s minimalist style. Prada CEO Andrea Guerra said, “Versace has huge potential. The journey will be long and will require disciplined execution and patience.”
To fund the purchase, Prada has acquired an additional €1.5 billion in debt.
This represents Prada's largest acquisition since its purchases of Helmut Lang and Jil Sander in the late 1990s, transactions that Bertelli previously referred to as "strategic mistakes."
Established in 1913 as a shop for leather products, Prada expanded under the leadership of Miuccia and Bertelli, who also own brands like Miu Miu and Church’s.
Launched by Gianni in 1978, Versace, recognized for its iconic Medusa head emblem, has been under the creative direction of Donatella since her brother passed away in 1997. (CNN)
Provided by Syndigate Media Inc. ( Syndigate.info ).
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