Large-scale acquisitions are not on the horizon for the Prada Group, according to the luxury company’s chief executive Andrea Guerra.
Speakingat the FT’s Business of Luxury summit in Venice, Mr Guerra said the Milan-based group was not seeking to acquire competitors such as Armani or Versace, and was instead focused on growing its existing brands including Miu Miu and Church’s.
“We are focused on our brands,” he said. The group, like other luxury labels, has recently snapped up local suppliers, including buying a just under 44 per cent stake in Superior, a Tuscan tannery, in 2022. “Most of the world’s fashion luxury apparel is made in Italy so anyone who is intelligent would be thinking [of acquiring suppliers].”
In April, Prada reported that Miu Miu’s net retail sales jumped 89 per cent year on year in the first quarter, pushing up group sales. Its main Prada brand is also growing despite a recent slowdown in the luxury sector.
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Prada is doubling down on its retail strategy, with planned investments of €1 billion over the next five years as luxury consumers seek “experience shopping”. But on Monday Mr Guerra – who joined the family-controlled group last January to lead the generational transition between co-founders Miuccia Prada and Patrizio Bertelli and their eldest son Lorenzo Bertelli – said big deals were currently not on the table.
“A lot of things will happen across the sector in the next few years, but we are focused on our brands and, at the end of the day, we aren’t the ones who decide on acquisitions, other companies will,” he said, referring to potential targets making decisions on whether to sell.
Mr Guerra also said on Monday that a dual listing in Milan, which the group had been considering since 2022, was no longer “a priority” for shareholders. Prada listed in Hong Kong more than a decade ago and had recently been aiming to diversify its investor base through a listing in its home city.
However, the founding family did not want to be diluted and the technicalities of the dual listing as well as the macro conditions have put off the plan.
Industry insiders have long suggested that Prada – one of a handful of Italian fashion houses that have not been sold to French conglomerates over the past two decades – will lead domestic consolidation.
The likes of Versace and Armani are said to be potential targets for the group. Versace owner Capri, which also owns Jimmy Choo and Michael Kors, agreed a $8.5 billion (€7.8 billion) sale to rival Tapestry last year, but is now in a US regulator’s crosshairs.
Rumours of a potential Prada deal increased last month after designer Giorgio Armani told Bloomberg: “I don’t feel I can rule anything out,” referring to his eponymous group potentially merging with a larger competitor or listing, in an apparent U-turn on his earlier statements.
Armani, who is the sole shareholder of his group, said last year he was determined to keep his company out of French hands in the future.
Asked on Monday whether reports Prada had been looking at potentially acquiring Armani were true, Mr Guerra said: “Oh, is it [what they say]?” – Copyright The Financial Times Limited 2024
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