Analysts Skeptical of Latest Prada, Versace M&A Speculation

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MILAN — Analysts are not buying into the idea that a new Italian luxury pole could emerge from Prada Group’s potential acquisition of Versace.

Following a report on Italy’s Il Sole 24 Ore daily on Friday that speculated that Prada is eyeing Versace, Equita analysts stated that “we see the acquisition of Versace as a challenging turnaround. Therefore, pending further elements, we believe that Prada’s real interest in Versace is unlikely.”

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Equita analyst Paola Carboni said Prada’s “management appears focused on organic growth, with still-untapped and important opportunities to catch from the strong potential of Prada and Miu Miu.”

She also believes that, while Prada, with its heritage and expertise in leather goods, could further develop the accessories of Versace, historically strong in couture and ready-to-wear, “the operation would be a challenging turnaround.”

Prada Group was not reachable for comment at press time. Publicly listed in Hong Kong, the company’s shares were not moved by the speculation, closing down 0.4 percent at 60.25 Hong Kong dollars.

Intesa Sanpaolo analysts underscored that Versace is “heavily impacted” by China’s slowdown and that the brand needs to be relaunched. “We can’t rule out [Prada’s potential] interest in acquiring a brand if there are significant industrial synergies, and the group has the financial strength that would allow this, but we expect it would approach a potential deal with a very cautious attitude.”

Backstage at Prada Spring 2025 Ready-to-Wear CollectionA
Backstage at Prada.

“On the positive, one could argue that Versace and Prada cater to very different consumer groups,” said Bernstein’s Luca Solca. “On the negative, Prada has an abysmal past in M&A,” Solca said, citing Jil Sander and Helmut Lang as examples.

Prada chief Patrizio Bertelli bought the two labels in the 1990s shopping spree with the goal to create a luxury pole. He sold both brands in 2006 to focus on Prada and Miu Miu and has candidly admitted the operations did not go as planned and defined them as “mistakes.”

Bertelli has since and so far only shown interest in supporting the manufacturing pipeline and Made in Italy excellence. In June 2023, Prada joined forces with the Ermenegildo Zegna Group to buy a 15 percent stake each in knitwear specialist Luigi Fedeli e Figlio Srl. This followed a first partnership in 2021, when the two companies acquired a majority stake in Filati Biagioli Modesto SpA, which specializes in the production of cashmere and other precious yarns. At the time, Bertelli said the “operation reflects the philosophy that our group has always pursued: direct control of the supply chain at every single stage of the production process, which also allows us to speed up on traceability of raw materials and on the transparency of our supply chain.”