Capri Holdings (CPRI, Financial), a global luxury fashion group, is reportedly planning to sell its Versace brand, with Prada exploring a potential acquisition. This news led to a pre-market increase of over 4.5% in Capri Holdings' stock, while Prada, trading on the Hong Kong Stock Exchange, closed down by 0.41%.
Prada is collaborating with its advisor, Citibank, to evaluate the potential acquisition of Versace. Capri Holdings currently owns three major brands: Versace, Jimmy Choo, and Michael Kors. The company's stock experienced a significant drop of 48.89% on October 25, 2024, after a U.S. federal judge rejected an $8.5 billion merger proposal with Coach's parent company, Tapestry. The judge cited concerns about reduced market competition and consumer harm.
Since mid-December of the previous year, rumors have been circulating about Capri's intentions to sell both Versace and Jimmy Choo. The company has enlisted Barclays to distribute relevant documents to potential buyers. Prada, along with its financial and legal advisors, is reviewing these documents, although other fashion groups and private equity funds might also be interested. Notably, Exor and Kering Group had considered similar actions a year ago.
A critical discussion point is Versace's valuation. Capri acquired Versace for €1.83 billion in 2018 from the private equity giant Blackstone Group. Given current challenges in the luxury sector, whether Capri can achieve a similar sale price is uncertain. In the quarter ending June 29, 2044, Versace's revenue fell by 15.4% to $220 million.
