Milan (Italy) (AFP) – Italian luxury fashion house Prada reported a bumper set of results for 2024 on Tuesday, defying analysts’ expectations and the crisis in luxury markets. Net profit jumped 25 percent to 839 million euros ($884 million), in results closely watched amid speculation about Prada’s forthcoming acquisition of Italian label Versace.
US parent company Capri Holdings has put Versace up for sale and entered exclusive negotiations with Prada at the end of February. Prada has already set the price at nearly 1.5 billion euros and could finalise the agreement before the end of the month, according to the Bloomberg news agency. Asked about these rumours on Thursday after a show during Milan Fashion Week, designer Miuccia Prada simply said: “Versace is on everyone’s table.”
A merger between the two legendary brands would create a luxury hub with a turnover of more than six billion euros that could increase Italy’s weight in a sector dominated by giants such as French groups LVMH and Kering. Such an agreement would also go against the trend of recent years that has seen big names in Italian fashion like Gucci, Fendi and Bottega Veneta pass into the hands of French competitors.
– Challenging environment –
The slowdown in luxury goods consumption worldwide, particularly in China, is affecting almost all of Prada’s competitors, which have recorded falls in sales and profits. But unlike LVMH and Kering, Prada is in rude health. The 2024 net profit was more than the 820 million forecast in the Factset Estimates survey, thanks to double-digit growth in sales in Asia and Europe. Turnover of the Hong Kong-listed company rose to 5.4 billion euros in 2024, up 15 percent on current exchange rates.
“We are pleased to see that our strategy continued to deliver above-market performance, notwithstanding the challenging environment,” said Prada group chairman and executive director Patrizio Bertelli. The brand has experienced “solid growth” with a four-percent increase in its retail sales at constant exchange rates over 2024 and also in the fourth quarter, the group said. Sales of sister brand Miu Miu, which targets a younger clientele, have exploded, soaring 93 percent in 2024 and 84 percent in the fourth quarter.
So how is Prada thriving when its rivals are not? “Consumer tastes have moved from maximalism to minimalism. This fits well with the nature of Prada,” Luca Solca, an analyst at research group Bernstein, told AFP.
– Restoring lustre –
By buying and relaunching Versace, Prada could further expand its empire, which also includes the shoe brands Car Shoe and Church’s. Founded in 1978 by designer Gianni Versace and his brother Santo, Versace is an icon of Italian fashion, known for its luxurious and sensual style. After Gianni was murdered in 1997, his sister and confidante Donatella took over the creative direction of the brand. But she lacked self-confidence and the label gradually fell apart.
“It’s hard to go from assistant to creative director. But when she started digging into Gianni’s archives, she managed to restore Versace’s luster,” Antonio Bandini Conti, a consultant designer, told AFP. Versace got back on track by appointing a new chief executive in 2009, Gian Giacomo Ferraris, and the brand diversified, opening hotels, selling watches and perfume. Capri Holdings bought the fashion house in 2018 for 1.83 billion euros. It had until then been majority-owned by the family, although US fund BlackRock had 20 percent.
Since the takeover, however, Versace has lost some of its shine again. “The Versace brand has become too commercial. Prada will be able to allow it to return to its golden age and reconnect with its luxury DNA,” said Bandini Conti. Its sales have suffered, falling by 15 percent to 193 million dollars in the third quarter of its staggered 2025 financial year, which ran to the end of December.
© 2024 AFP
