Is another mega luxury M&A deal in the works?
After the LVMH Moët Hennessy Louis Vuitton-Tiffany tie-up and the rumors about a possible Kering takeover of Moncler, speculation is swirling that Prada may be looking for a buyer.
On Thursday, a spokesperson for Prada denied the company was for sale.
But according to sources, Prada’s co-chief executive officers Patrizio Bertelli and his wife, creative director Miuccia Prada, flew to Paris last December to meet with Kering chief François-Henri Pinault. A separate source said that Compagnie Financiere Richemont may be another interested party.
The luxury giant, which specializes in hard luxury, and has a fashion and accessories division that includes Chloé and Dunhill, has been in an acquisitive mood of late, having purchased Buccellati last year and formed a joint venture with designer Alber Elbaz for a new fashion and lifestyle company. An asset such as Prada, one of the most recognizable, directional and established fashion brands around, via an outright purchase or merger, could transform the fortunes of its soft luxury division.
Richemont declined to comment. The company plans to report third-quarter and Christmas trading figures on Friday.
This is not the first time that Prada and Richemont have been linked in a possible deal. Ten years ago this month Prada denied media reports it was in talks to sell a stake to Richemont. In 2011 the Italian company listed on the Hong Kong Stock Exchange after several delays.
Its market capitalization is 74.08 billion Hong Kong dollars, or $9.5 billion. Richemont, which is quoted on the Swiss Stock Exchange, has a market cap of 40.23 billion Swiss francs, or $41.66 billion at current exchange.
In addition, Prada took the leap into online selling in Europe via the Richemont-owned Net-a-porter and the German company, Mytheresa.com.
As reported, sources said LVMH took a serious look at Prada last year, but discussions stopped over the summer and no deal materialized.
Although Prada has always denied it has ever wanted to sell, speculation persists.
In 2018, unveiling a new industrial complex in Tuscany’s Valvigna, the 73-year-old Bertelli said the company was not for sale. “Of course there are suitors looking at us; it’s normal, but we are not selling and we will never sell,” he said at the time.
Bertelli and Miuccia Prada’s son Lorenzo joined the group in September 2017, starting as head of digital communication. He is now head of marketing and communication. In Valvigna Bertelli said his son was “acquiring know-how and experience in communication and is preparing to possibly helm the company if he wants to. We’ll see. We don’t have big problems in management.”
Bertelli also dismissed any idea of retiring. “Retirement is associated to a physical and mental state. It’s a silly myth in an old society.”
Full-price sales, a positive trend in wholesale and a strong performance of its ready-to-wear and footwear collections helped Prada SpA see gains in profits and revenues in the first half last year.
Net profits jumped 46.6 percent to 155 million euros, benefiting from the Patent Box tax relief relating to the years 2015 to 2019.
Sales rose 2 percent to 1.57 billion euros compared with 1.53 billion euros in the prior year. Prada has stopped seasonal markdowns and rationalized its wholesale channel, which were expected to provide results in the second half of the year and the first half of 2020. The group has also upped its investments in digital technology across the business.