Milan, Italy
Reuters
–
Prada concluded an agreement to buy a smaller Versace rival of Capri Holdings in a decision to unite two of the biggest names in an Italian way. The agreement has a business value of $ 1.375 billion, Prada announced on Thursday.
Prada seeks to develop, having challenged a slowdown in luxury demand, while Versace worked at a loss. The merger strengthens the hand of Italy in a luxury industry led by French conglomerates.
“We aim to continue the heritage of Versace to celebrate and reinterpret his daring and timeless aesthetic,” said Prada president, Patrizio Bertelli.
“At the same time, we will provide him with a solid platform, reinforced by years of investment in progress and rooted in long-standing relationships,” he added.
The Prada price has agreed to pay for Versace is a sharp reduction compared to around $ 2.15 billion, including the debt that Capri paid for Versace in 2018. Previously known as Michael Kors, Capri bought Versace from the Versace and Blackstone family.
Owning Versace, with its daring prints in a baroque style, will bring new customers to Prada, known for its minimalist style.
“Versace has enormous potential. The trip will be long and will require disciplined execution and patience,” said Andrea Guerra, CEO of Prada.
This decision comes at a time when several acquisitions and IPOs were scuttled following a world sale on shares and recession fears launched by the new prices of US President Donald Trump this month.
Since Prada’s acquisitions in the late 1990s of Helmut Lang and Jil Sander, which Prada shareholder, Bertelli has called “strategic errors”, the group has largely moved from the major agreement.
