In 1981, American fashion designer Michael Kors founded the fashion house Capri Holdings as the holding company for his namesake brand. The company eventually acquired other esteemed brands like Versace and Jimmy Choo.
Unfortunately, after many prosperous years, Capri’s empire has begun to crumble, as it has been experiencing some of the steepest sales declines in its history.
This is partially due to the softening in customer spending due to inflation and an uncertain global economy, which has led the luxury fashion market to experience one of its worst slumps since the Great Recession.
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However, like in any other market sector, a few outliers have overcome all odds due to their savvy business executions and trend-forward strategies.
People walking in front of a Versace store.
Prada inches in to acquire Versace from Capri
Recently, it was revealed that Prada is in talks with Capri CPRI to acquire the luxury fashion brand Versace for nearly $1.6 billion, and an agreement could be reached as soon as the end of March this year.
The Prada Group PRDSF is a Milan-based luxury fashion house founded in 1913. It owns its namesake brand, Prada, and other renowned brands, including Miu Miu, Church’s, and more.
In 2018, Capri acquired Versace for $2.1 billion to revitalize the struggling brand and expand the company.
If the deal comes to fruition, Prada would receive a considerable discount, representing nearly a half-billion-dollar loss for Capri, who has already been facing continuous financial strains and steep declines.
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According to Capri’s latest earnings report, overall revenues decreased 11.6% compared to the prior year, with Versace’s down 15%.
Unlike its rivals, Prada has been immune to the luxury fashion slump, delivering outstanding sales and generating continuous revenue growth.
In its latest earnings report, Prada’s revenues increased by 17% year over year, which is well above-market, with Miu Miu generating over 93% retail growth.
Versace’s creative direction is transferred to former Prada designer
The luxury fashion house of Versace was founded by Gianni Versace in 1978 and quickly became an international sensation in the high-fashion community.
Unfortunately, 19 years after the company’s inception, Gianni was fatally shot outside of his Miami Beach mansion. That same year, his sister, Donatella Versace, took over the brand to carry on her brother’s legacy and has been at the forefront of the brand’s creative direction since.
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However, after a nearly 30-year reign, Donatella announced on Mar. 13 that she would be stepping down as the company’s chief creative officer.
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Dario Vitale will become Versace’s new chief creative officer at the beginning of April this year. Donatella will take on a more minor role as the chief brand ambassador.
Vitale is a former design and image director for Miu Miu, a Prada-owned brand. Thus, Prada’s successful acquisition of Versace seems even more promising.
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