Milan (Reuters) – The Prada luxury group announced Thursday the signing of an agreement to Capri Holdings for the resumption of Prada, an operation that will bring two of the biggest names in Italian fashion in a difficult context for the industry.

The transaction was established on the basis of a business value of $ 1.375 billion (1.24 billion euros), including debt.

This rapprochement, which occurs a few weeks after the announcement of the departure of Donatella Versace from the artistic direction of the eponymous group, constitutes one of the most ambitious attempts to create a luxury conglomerate in Italy.

If the country represents 50% to 55% of the world’s production of luxury goods, according to estimates from the Bath firm, it lacks a group of scope comparable to French giants in the sector such as LVMH and Kering which both hold several major Italian brands like Fendi and Gucci.

Prada, based in Milan but listed on the Hong Kong Stock Exchange, is controlled by the stylist Miuccia Prada and her husband Patrizio Bertelli. If it is the first Italian luxury group in terms of turnover, its market capitalization of 14 billion euros places it far behind LVMH (260 billion euros).

In fact, the combined turnover of the five largest Italian luxury groups listed on the stock market – Prada, Moncler, Ermenegildo Zegna, Brunello Cucinelli and Ferragamo – is still much lower than around 17 billion euros in Kering, even after a sharp drop in sales of the French group last year.

“Prada’s ambition to become a leading Italian luxury conglomerate constitutes a significant advance in a market dominated by French groups. This is exactly what many Italians hoped,” said Achim Berg, advisor in the fashion and luxury sector.

“New era”

Prada and Versace both have their origins in Milan and always have their headquarters there, just four kilometers from each other.

Donatella Versace, whose family sold the company seven years ago, praised this new partnership.

“Gianni [son frère, fondateur de la marque et décédé en 1997, NDLR] And I have always had great admiration for Miuccia, Patrizio and their family, “she said.

“I am honored that the brand is entrusted to an Italian family business of trust and I am ready to support this new era for the brand in all possible ways,” she added.

“Our objective is to perpetuate the heritage of Versace by celebrating and reinterpreting its daring and timeless aesthetic,” said Padra president, Patrizio Bertelli.

The valuation retained for Versace is much lower than that of almost $ 2.15 billion, debt included, retained during the takeover of the Italian group by Capri in 2018.

For several quarters, Versace has been in deficit in a context of slowing down the luxury industry which spares only few players.

With the acquisition of Versace, known for its Baroque prints, Prada, whose style is much more minimalist, hopes to attract new customers.

“Versace has enormous potential. The path will be long and will require rigor and patience,” said Prada director of Prada on Thursday Andrea Guerra.

(Report Elisa Anziolin, written by Keith Weir, Blandine Hénault and Mara Vîlcu, published by Benjamin Mallet, Augustin Turpin and Blandine Hénault)

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