Prada SpA is working with advisers to evaluate the Versace brand as it weighs a bid for the Italian fashion company owned by Capri Holdings Ltd.
Milan-based Prada, a rare standout amid the luxury sector’s recent downturn, has kicked off a full review of Versace after gaining access to its latest financial and sales figures, people familiar with the matter said. Shares of Capri rose as much as 7.5 percent in premarket trading in New York on Wednesday.
Prada is evaluating a possible bid, said the people, asking not to be identified discussing private deliberations, adding there is no guarantee that the review would result in any formal offer. Prada declined to comment. Capri didn’t respond to requests for comment outside business hours.
Versace reported revenue for the third quarter of the current fiscal year totalling $193 million, a 15 percent year-on-year decline, according to a statement. Over the same period, the brand posted an operating loss of $21 million, up from $14 million a year ago.
A potential buyout by Prada could see Versace, a storied Italian brand, returning to a domestic owner after other big names in the industry were scooped up by global players.
French conglomerate LVMH owns a string of Italian brands including Fendi and Loro Piana, and it recently bought a stake in the company that controls Moncler SpA.
The LVMH-backed fund L Catterton played a central role in taking shoemaker Tod’s SpA private, while Kering SA owns Gucci and Bottega Veneta and has an option to gain control of Valentino.
Family-owned Prada, whose shares are listed in Hong Kong, has emerged as one of the winners amid a global luxury sector downturn. Its sales surged in the third quarter of last year on the back of its Miu Miu brand, a hot commodity for younger consumers.
Capri, whose portfolio also includes Michael Kors, has hired Barclays Plc to explore options for some of its controlled companies after an $8.5 billion combination attempt with Tapestry Inc. was scrapped following a court order, Italian media earlier reported.
Italian website The Platform reported this week that Prada had signed an exclusive agreement to run due diligence on Versace, citing market sources and social media accounts.
By Antonio Vanuzzo, Luca Casiraghi and Tommaso Ebhardt
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Report: Capri Holdings Has Pitched Prada To Acquire Versace
Prada is among the potential investors who could be evaluating a purchase of Versace, Italian daily Il Sole 24 Ore reported Friday citing market speculation.
