Backstage at Prada Men's Fall 2018

MILAN — Days after showing the brand’s men’s collection for fall 2018, which was a hit with buyers in Milan, Prada is garnering attention for something altogether different.

Prada Group shares have jumped up 20.6 percent since Jan. 2, closing at 34.15 Hong Kong dollars, or $4.37 at current exchange, on Wednesday, sparking M&A rumors.

A Prada spokesman had no comment on the shares’ gain or the speculation of a possible sale on Wednesday.

One Milan-based analyst, who spoke on condition of anonymity, said he was not aware of any potential deal, but noted that LVMH Moët Hennessy Louis Vuitton and Kering would have the financial muscle to buy Prada, although he saw the fashion company have a better fit with the latter. 

Prada’s enterprise value is pegged at 87.9 billion Hong Kong dollars, or about $11.2 billion.

After several false starts, the Milan-based luxury group launched its initial public offering in June 2011 on the Hong Kong Stock Exchange, selling nearly 17 percent of its capital, mainly to fuel the expansion of its retail network. Miuccia Prada and her husband Patrizio Bertelli, who share the chief executive officer role, and their family are the main shareholders of the group, which includes the Prada, Miu Miu, Car Shoe and Church’s brands.

Prada, which is going through a phase of restructuring, has yet to release its year-end financial results, but in September, commenting on the group’s decrease in profitability in the first half of 2017, Bertelli pointed to its digital transformation and was positive about long-term growth. “We are confident that our action plan is the best way to return to steady growth in revenues and margins, albeit aware that benefits may take longer than expected. Our cash flow and balance sheet remain solid, allowing us to focus on value creation for shareholders over a broad time horizon,” said the executive at the time.

While the Asia-Pacific area showed signs of recovery and the new ready-to-wear and leather goods collections posted positive results, in the first half of the fiscal year ending July 31 net profit was down 18.2 percent to 116 million euros and revenues decreased 5.5 percent to 1.46 billion euros.

“Having one of the best known and most respected international brands, with undisputed leadership in design and innovation, means we have to make choices in the pursuit of growth that privilege the preservation of the cultural and stylistic fundamentals that our brand identity is based on,” added Bertelli.