The mega deal in the fashion world is taking shape: the shares of Capri Holdings and fashion giant Prada surged in the past 24 hours following reports of the emerging deal, according to which the Italian fashion company Prada will acquire the luxury brand Versace, owned by Capri. Versace was founded by the late designer Gianni Versace and is currently managed by his sister, Donatella Versace.
According to reports, the emerging deal is expected to be valued at approximately $1.6 billion. Following the announcement, Capri’s shares rose by 9.6%, while Prada’s shares increased by 4.1%.
The acquisition of Versace by Prada will allow the Italian company to expand its presence in the global luxury market and compete with major luxury groups such as LVMH and Kering.
Capri, which also owns brands such as Michael Kors and Jimmy Choo, has struggled to grow its sales and even published a revenue forecast last month that fell short of analysts' expectations. The acquisition of Versace adds to the challenges the company faces, including the failed merger with Tapestry, valued at $8.5 billion.
Versace, a fashion house famous for its glamorous designs, has been owned by Capri since 2018, when it was acquired for approximately €1.8 billion. The acquisition talks are advancing after an initial risk assessment did not reveal significant issues. However, the negotiation process may still encounter further changes or unforeseen challenges.
UBS analysts estimate that with the acquisition of Versace, Prada will be able to realize the brand’s long-term potential and become a major player against its French competitors in the luxury sector.
