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Prada Group has agreed to acquire Versace from Capri Holdings for €1.25 billion ($1.38 billion), the companies said in a statement Thursday. Prada is borrowing an additional €250 million to invest in relaunching Versace, which turned loss-making last year as it struggles to keep up with bigger, heritage brands amid a global downturn in luxury sales.
The deal is going ahead despite a global market rout sparked by Trump’s trade war, which risks hammering demand for high-end products in addition to clouding the outlook for fashion’s global supply chain. Shares in Michael Kors and Versace parent Capri tumbled 36 percent in a week, before partially recovering Wednesday after Trump announced a 90-day pause on the heftiest tariffs on imports from all countries except China. In spite of a volatile market that is likely to pinch both strong brands like Prada and struggling rivals like Versace, Prada Group appears to have decided it couldn’t pass up the chance to add one of Italy’s most famous brands to its stable.
Turning around Versace will be a challenge for the group controlled by Miuccia Prada and her husband Patrizio Bertelli, but could provide a new avenue for growth beyond its flagship Prada brand and Miu Miu sister label, as well as helping to fend off consolidation by French groups LVMH and Kering. “With its highly recognisable aesthetic, the brand constitutes a strongly complementary addition to the Prada Group’s portfolio and displays significant untapped growth potential leveraging multiple value creation levers,” the company said in a statement. Versace’s estimated revenues fell 19 percent to $810 million in the fiscal year through March, Capri said. That’s roughly in line with the size of the business when the American group acquired it for $2.1 billion in 2018. The brand is hoping to break even by March 2026 after operating margins swung to a high-single-digit loss over the past year.
Last month, Versace named a new artistic director hired from Prada’s Miu Miu label, Dario Vitale, to help revamp its collections. Vitale is a seasoned operator, whose fresh creative vision could revive interest in a brand that’s been designed by co-founder Donatella Versace since 1997. On the other hand, industry sources say the designer’s exit from Prada Group was fraught. And his appointment could raise concerns among executives that his Versace could cannibalise sales of fast-growing Miu Miu. The deal will test recent efforts to financialise and professionalise Prada’s governance and operations. Over the past five years, the Milan-based firm has sought to accelerate its succession plans, bringing in a new CEO, CFO and deputy chairman as founders Prada and Bertelli relinquished their co-CEO titles. Star designer Raf Simons joined the company as co-creative director of the Prada brand in 2020.
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Donald Trump on Wednesday announced a 90-day pause to the sweeping tariffs he unleashed on all major US trading partners last week, triggering immediate relief on Wall Street as he backed down from a policy that threatened to upend global trade. At the same time, Trump boosted tariffs on China to 125 per cent, doubling down on his trade war with the world’s second-largest economy.
The pause on Trump’s so-called reciprocal tariff scheme is the latest in a series of U-turns and reversals made by the US president in the chaotic trade policy rollout since his inauguration in January. The breadth and size of US tariffs on its major trading partners triggered a global sell-off in equities and attracted rare criticism of Trump from Republican lawmakers on Capitol Hill. Multiple billionaire financiers also slammed the levies, including some of the Republican party’s biggest backers.
#fashion #trumptariffs #prada #versace