Prada is in talks to buy the Versace fashion brand from the US investor Capri Holdings for a price that could reportedly reach nearly €1.5bn (£1.2bn).
Milan-based Prada and the New York-listed Capri could reach a deal for Versace this month, Bloomberg reported, although the talks could still fall apart.
A deal would bring the Versace brand back under Italian ownership, and would make Prada larger as it tries to compete with France’s LVMH, the owner of luxury brands including Louis Vuitton, Moët & Chandon and Hennessy.
Prada was founded in 1913 in Milan by Mario Prada, but has been led since the 1970s by his granddaughter Miuccia Prada. Capri was formerly known as Michael Kors but was renamed after the US fashion brand took over the shoemaker Jimmy Choo in 2017, and then Versace in 2018.
A sale at $1.5bn would represent a loss for Capri. Michael Kors bought Versace for $2.1bn but the Italian brand has struggled in recent years.
Capri this month reported revenues of $193m for Versace in the final three months of 2024, down 15% compared with the same period a year earlier. It is expected to be lossmaking this financial year, and then to break even in the next.
Versace does not produce items such as luggage that remain resilient sellers for the likes of Louis Vuitton during slower periods. It is also facing questions over whether it will remain under the leadership of Donatella Versace, its designer since the death of her brother, Gianni, in 1997.
At Milan fashion week, the Prada design boss, Miuccia Prada, said the Versace deal was “on everyone’s table”.
Prada has been given access to Versace’s latest financial and sales figures after completing initial due diligence, Bloomberg reported.
Capri had said it was optimistic about Versace’s long-term growth potential, but its forecasts show sales falling from $810m in the current financial year to $800m in the next year. However, the company forecast that sales would increase to $900m by 2028 and $1.5bn in the longer term.
The agency S&P Global Ratings downgraded Capri’s debt in February, saying performance pressures and high borrowing could pose problems in repaying its debts.
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Capri was dealt a blow in 2024 after the US Federal Trade Commission, which regulates competition issues, sued to block a takeover of Capri by Tapestry, the parent company of the Coach brand, for $8.5bn.
Shares in Prada, which are listed in Hong Kong, rose 3.5% on Monday after details of the deal emerged.
Prada and Capri did not respond to requests for comment.
