Prada agrees to buy Versace

Prada’s deal to buy Versace revives hopes for a ‘Made in Italy’ luxury champion after many other family-founded brands ended up in French, Swiss or US hands, and comes as many Italian groups are outperforming the struggling sector.

- ELISA ANZOLIN MILAN (REUTERS)

The $1.375 billion deal brings one of fashion’s best-known Italian labels back under Italian control after it was sold to US-listed Capri Holdings, then known as Michael Kors, for $2.15 billion including debt in 2018.

Despite Italy accounting for 50% to 55% of global personal luxury goods production, according to consultancy Bain’s estimates, the country lacks a group with a scale that matches up to French players such as LVMH and Gucci-owner Kering.

Milan-based Prada, controlled by designer Miuccia Prada and husband Patrizio Bertelli and listed in Hong Kong with a market capitalisation of about €14 billion ($15 billion), is the largest Italian luxury fashion group by revenue.

But the group, which also includes the fast-growing Miu Miu label, has been a relative minnow in terms of stock market valuation compared with the likes of Louis Vuitton-owner LVMH.