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Italian fashion brand Prada could be evaluating a purchase of the Versace label, daily Il Sole 24 Ore reported on Friday, citing market speculation.
Versace owner Capri Holdings Ltd. has pitched the deal to Prada and other potentially interested investors, the newspaper said. The luxury house could be working with financial and legal advisers, including Citi, to decide whether to pursue an accord, the newspaper said, citing “rumors.”
A representative for Prada declined to comment. A representative for Citi also declined to comment.
“Pending further elements, we believe that Prada’s real interest in Versace is unlikely,” Equita SIM analyst Paola Carboni wrote in a note to clients. While its expertise in leather goods could help develop Versace accessories, “on the other hand, we see the acquisition of Versace as a challenging turnaround.”
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Versace owner Capri Holdings Ltd. has hired Barclays to explore options for the label and other brands in its portfolio, such as Jimmy Choo, according to the Sole report.
That comes after an $8.5 billion combination attempt between Capri and Tapestry, Inc. was scrapped following a court order to freeze it due to regulatory issues.
Family-owned Prada has emerged as one of the rare winners amid a global luxury sector downturn. Its sales surged in the third quarter of last year on the back of the Miu Miu brand, which is enjoying rising popularity among younger buyers.
The family has taken initial steps in a long-term push to secure the future of Prada. Lorenzo Bertelli, the eldest son of Miuccia Prada and Patrizio Bertelli, has been gathering experience in day-to-day operations by leading marketing and sustainability units, and is set to succeed his parents as the family’s leader at the company.
By Antonio Vanuzzo and Flavia Rotondi
Learn more:
Tapestry and Capri Call Off Their Merger
The $8.5 billion deal is off after the US Federal Trade Commission successfully blocked it in court. In announcing the termination, the Coach-owner said it would buy back stock, while Capri outlined a turnaround plan that includes closing some Michael Kors stores.
