Capri Holdings (CPRI) stock soared today alongside reports Prada (PRDSY) is closing in on a deal to acquire the Versace brand and business from the apparel company. Prada is willing to spend up to 1.5 billion euros ($1.6 billion) to purchase Versace, which Capri bought for roughly 1.8 billion euros in 2018.
The sale of Versace would come as Capri reevaluates the brands under its control. This follows a failed merger attempt with Tapestry (TPR) that was blocked by a federal judge. That saw the fashion company hire Barclays for advice on what to do with some of its portfolio, as falling revenue and debt concerns weighed on CPRI stock.
Investors are receptive to a sale of Versace with CPRI stock up 6.96% in pre-market trading today. That builds on a 4.37% increase year-to-date and an 18.57% rally over the last 52 weeks. News of Prada seeking to purchase Versace broke near the start of 2025.
How Prada Benefits from the Versace Deal
In Prada’s case, the purchase of Versace would help bolster its brands to better compete in the fashion industry on a global stage. That’s especially true as its current focus on minimalistic brands leaves it open to exploring more extravagant offerings, such as those sold by Versace, without damaging sales.
Terms of the deal between Prada and Capri aren’t set in stone. However, talks have progressed to the point where investors might see an official announcement sometime this month.
Is CPRI Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Capri is Hold based on three Buy and nine Hold ratings over the last three months. With that comes an average price target of $23.83, a high of $31, and a low of $19. This represents a potential 8.42% upside for CPRI stock.
