Shares in fashion group Capri Holdings (CPRI) looked 2% more stylish today as talks reportedly opened between it and Prada over an acquisition of its Versace brand.
Historic Move for Italy
As reported on Reuters, the chief executive of the iconic Milan-based fashion label Prada, Andrea Guerra, flew to New York potentially to start talks to buy Versace, and unite two of the most historic names in Italian clothes. However, this was only according to sources and was not confirmed either way by Prada itself.
This followed news that Donatella Versace was stepping down as the main designer for the Versace brand after nearly 30 years in the role. Donatella, who took up the role in 1997, will now take on the position of Chief Brand Ambassador as of April 1 this year.
Dario Vitale, a designer from Miu Miu, a smaller brand within the Prada group, will take over as chief creative officer. This move, suggests analysts, could facilitate a potential acquisition of Versace by Prada.
Versace Hit By Slowdown
Capri Holdings bought Versace for around $2 billion in 2018. Its other brands include Michael Kors and Jimmy Choo which reportedly has also been of interest to Prada.
A deal for Versace seems to have more legs however with reports earlier this month that Prada was close to a deal for a $1.64 billion price tag. That, of course, would be less than Capri originally paid for Versace but the brand has been struggling for a while. Capri recently reported that Versace recorded revenues of $193 million in the final three months of 2024, down 15% on the same time last year.
It blamed a general global slowdown in demand for luxury as well as a strategic own-goal in that it reduced the amount of lower-priced entry-level products it sold.
Is CPRI a Good Stock to Buy Now?
On TipRanks, CPRI has a Hold consensus based on 3 Buy and 9 Hold ratings. Its highest price target is $31. CPRI stock’s consensus price target is $23.83 implying an 10.17% upside.
