Prada Group’s CEO, Andrea Guerra, has dismissed speculation about major takeovers in the foreseeable future. Conversing with Roula Khalaf, Financial Times editor, during the FT Business of Luxury summit held in Venice, Guerra revealed that the company headquartered in Milan has no plans to purchase rivals like Armani or Versace. Instead, its strategy is centred around developing its existing brands such as Miu Miu and Church’s.
“Expanding our own brands is our principal focus,” Guerra clarified. Recently, like its luxury peers, the group has been purchasing local suppliers. In 2022, they purchased almost half of Superior, a Tuscan-based tannery. Guerra stated, “The majority of global high-end fashion is Italian-made, so it would be smart to consider supplier acquisitions.”
Prada declared in April that Miu Miu enjoyed an 89% surge in net retail sales in this year’s first quarter, driving up the group’s overall sales. Despite the recent slump in the luxury industry, the flagship Prada brand continues to grow.
The company plans to invest €1 billion in retail strategy over the forthcoming five years to meet the demand of luxury clientele for ‘experience shopping’. However, Guerra, who joined the family-run group in the preceding January to steer the generational switch-over from co-founders Miuccia Prada and Patrizio Bertelli to their firstborn Lorenzo Bertelli, made it clear that significant business transactions are not presently under consideration.
“Even though the sector will undergo numerous changes in the ensuing years, we are channeling our attention on our brands and ultimately, acquisition decisions are up to other businesses, not us,” he explained, alluding to prospective targets determining their sell-off options.
Another significant revelation by Guerra was that a dual listing in Milan, an idea mulled over by the group since 2022, had ceased to be of prime importance to shareholders. The company, which went public in Hong Kong over a decade ago and was looking to broaden its investor base with a local listing, has temporarily postponed this plan due to the founding family’s reluctance to dilute their shares and the complex nature of the dual listing amidst prevailing market conditions.
Industry experts have often proposed that Prada, one amongst a few Italian fashion brands that haven’t been bought by French corporations in the past twenty years, will spearhead domestic consolidation.
Armani and Versace are rumoured to be on the radar of a certain group, according to circulated information. Capri, the parent company of Versace, which also counts Jimmy Choo and Michael Kors amongst its portfolio, agreed to a sale of estimated $8.5 billion (£6.2 billion) to competitor Tapestry in the previous year. However, this development has now drawn the scrutiny of American regulatory authorities.
Chatter about possible negotiations with Prada escalated the previous month when fashion designer Giorgio Armani spoke to Bloomberg, indicating possible future moves for his namesake group which could include consolidation with an industry rival or a potential listing. This indicated a possible reversal from his earlier statements.
Holding 100% ownership of his group, Armani had expressed to the Financial Times the past year his resolute intention to maintain control over his corporation and steer it away from French acquisition in the future.
In response to the media speculation regarding a potential acquisition of Armani by Prada, Mr Guerra questioned the veracity of these reports on Monday. – The Financial Times Limited 2024 Copyright.