Prada has put in a strong performance in 2024, despite cooling demand for luxury goods in China. The Italian fashion house may take over Versace as early as this month, and it might not stop there.
Facing weakened competition
The declining interest of Chinese consumers in Western luxury goods, combined with a deteriorating Chinese economy, means that many luxury brands are experiencing headwinds. However, while competitors such as LVMH and Gucci are facing shrinking digits, Prada is managing to expand its market share. Sister brand Miu Miu in particular showed impressive growth, almost doubling its sales, thanks to growing popularity among young consumers.
Net profit rose 25% to 839 million euros in 2024, while sales rose 15% to 5.4 billion euros. Japan was the strongest performing market with a 46% increase, while Europe recorded 18% growth, helped by tourists. Overall, retail sales totalled 4.8 billion euros, up 18% on last year.
Jimmy Choo heading to Prada too?
The Italian fashion house is also said to be close to acquiring compatriot Versace: according to Bloomberg, the deal could be completed this month for 1.5 billion euros. Versace’s US owner Capri Holdings is struggling with declining performance and is reportedly open to a sale. As recently as 2018, Capri paid 1.8 billion euros for Versace, but recent figures show the brand is struggling.
An acquisition would help Prada appeal to a broader customer base, especially in the US and among younger consumers looking for eye-catching fashion. Moreover, it would be an important move in the Italian fashion industry, where many luxury brands have fallen into foreign hands in recent decades. However, Prada may be pushing it one step further. According to Italian newspaper Corriere della Sera, Prada would also like to snatch away Jimmy Choo from Capri.
