Prada speaks up on reports of Versace tie-up

Prada’s CEO indicated on Tuesday the Italian fashion group was at least looking at potential mergers and acquisitions following reports linking it with possible deals for fellow luxury brands Versace and Jimmy Choo.

Speaking after Prada, which has defied a slowdown in luxury demand to outperform many of its peers, reported a widely expected 21% increase in operating profit last year, Andrea Guerra gave no details of potential tie-ups but suggested it was open to opportunities.

“On one side we are focused on our brands. On the other side … when things come around, you’ll look at them,” Guerra said, when asked about the group’s investment strategy on a post-earnings call.

A source told Reuters last month that Prada, controlled by designer Miuccia Prada and her husband Patrizio Bertelli, has been given access to Versace’s financial data.

Bloomberg News reported on Sunday that Prada was moving closer to a deal after agreeing a price of nearly 1.5 billion euros ($1.6 billion) for the business founded by the late Gianni Versace in the 1970s, where his sister Donatella has been the creative head for more than two decades.

Italian newspaper Corriere della Sera reported on Tuesday that Prada is interested in the acquisition of both Jimmy Choo and Versace from current owner Capri Holdings (CPRI.N) for a total outlay of between 1.5 billion euros and 2 billion euros.

The group’s Chief Financial Officer Andrea Bonini had earlier said it did not comment on rumours when asked about the group’s potential interest in Versace and Jimmy Choo.

GROWTH MAINTAINED

Prada, which is listed in Hong Kong, reported a 17% increase in net revenues in 2024 to 5.4 billion euros ($5.7 billion), matching analysts’ expectations, according to data from LSEG.

The group had a net cash position of 600 million euros at the end of December, which could help to fund a potential acquisition.

Revenues grew by double figures across all regions, with the exception of the Americas, which reported 9% growth thanks to an improvement in the second half of the year.

The Asia Pacific region saw a good performance over the year, with 13% growth, with an improvement in the last quarter across all main areas.

Retail sales, which account for most of the total sales, rose 18% in 2024, thanks mainly to the smaller Miu Miu brand, which posted 93% growth over the year. Growth at Prada’s main brand was more moderate, around 4% year-on-year.

“For the year ahead, we retain our ambition to deliver solid, sustainable, and above-market growth,” Guerra said in the earnings statement. ($1 = 0.9485 euros)