Milan, Italy — Prada’s deal to purchase Versace revives hopes for a “Made in Italy” luxurious champion after many different family-founded manufacturers ended up in French, Swiss or US arms, and comes as many Italian teams are outperforming the struggling sector.
The $1.375bn deal brings one among vogue’s best-known Italian labels again underneath Italian management after it was bought to US-listed Capri Holdings, then referred to as Michael Kors, for $2.15bn together with debt in 2018.
Regardless of Italy accounting for 50%-55% of worldwide private luxurious items manufacturing, in line with consultancy Bain’s estimates, the nation lacks a bunch with a scale that matches as much as French gamers resembling LVMH and Gucci-owner Kering.
Milan-based Prada, managed by designer Miuccia Prada and husband Patrizio Bertelli and listed in Hong Kong with a market capitalisation of about €14bn, is the most important Italian luxurious vogue group by income.
However the group, which additionally consists of the fast-growing Miu Miu label, has been a relative minnow when it comes to inventory market valuation in contrast with the likes of Louis Vuitton-owner LVMH.
The Versace deal comes after Andrea Guerra grew to become Prada’s CEO in 2023 to bridge a change in era, with Lorenzo Bertelli, the son of the corporate’s principal house owners and its chief advertising officer, considered the inheritor obvious.
“Prada’s ambition to turn into a number one Italian luxurious conglomerate is a big transfer in a market that’s dominated by French teams. It’s precisely what many Italians have been hoping for,” mentioned Achim Berg, a vogue and luxurious trade adviser.
The mixed income of the 5 greatest Italian-owned listed luxurious teams — Prada, Moncler, Ermenegildo Zegna, Brunello Cucinelli and Ferragamo — continues to be properly under Kering’s roughly €17bn, even after an enormous fall in gross sales on the French group final yr.
Firm founder Brunello Cucinelli summed up the distinction in strategy on the 2 sides of the Alps in usually vibrant vogue.
“Our esteemed French counterparts are nice financiers,” he informed the Milano Trend International Summit 2024 final October.
“However we Italians regard our ‘tiny large’ firms as in the event that they have been our little kids, so we need to take care of them and hand them all the way down to a subsequent era,” he added.
Formidable transfer
Whereas LVMH and Kering have swallowed many Italian manufacturers, even the bigger Italian teams have till now been comparatively reluctant to make large acquisitions.
“This acquisition represents Prada’s severe try and construct a bunch — and a way more formidable one in comparison with their previous ventures with Helmut Lang and Jil Sander,” Berg mentioned.
Prada’s chair and co-owner Patrizio Bertelli outlined the acquisition of these two manufacturers — which have been purchased on the flip of the century and bought a couple of years later — as “strategic errors”. The group has since centered primarily on natural development, excluding acquisitions of suppliers.
Each Prada and Versace have their roots in Milan and nonetheless have headquarters there, simply 4km aside.
Milan-based Moncler, the mountain gear model that was purchased and revived by Italian entrepreneur and present principal shareholder Remo Ruffini in 2003, has additionally proven some curiosity in deal making, shopping for Italian streetwear model Stone Island in a €1.15bn deal agreed to in late 2020.
Moncler’s internet money place of €1.3bn has fuelled analyst discuss of extra offers, however the group has denied such hypothesis.
Jil Sander is now a part of Italian entrepreneur Renzo Rosso’s OTB Group, which additionally consists of manufacturers resembling Diesel and Maison Margiela. However with annual gross sales of €1.7bn, it stays comparatively small.
The massive Paris-based teams, in the meantime, have continued to make forays into Italy, underscoring the problem an enlarged Prada would face to compete with them.
Within the newest offers, Kering purchased a 30% stake in Italian maison Valentino in 2023, and LVMH final yr helped to take Tod’s non-public and took a ten% stake in Moncler’s prime shareholder.
Within the longer-term, eyes are on firms resembling Milan-based Armani and Dolce & Gabbana, among the many few in Italy which are nonetheless absolutely family-owned and unlisted.
Their final fates could possibly be decisive in any effort to create a real Italian powerhouse in international vogue.
Reuters
