As Capri Holdings Ltd. gets closer to selling its Italian luxury brand Versace to Prada SpA, shares of the US company have surged. Capri and the Italian family business have reached an agreement to pay up to € 1.5 billion (US $ 1.6 billion) for the fashion brand.
Prior to Monday’s commencement of normal trading in New York, Capri Holdings increased by as much as 9.6 per cent. In recognition of the significance of the Chinese market, Prada’s stock rose as high as 4.1 per cent in Hong Kong, where it was listed in 2011.
A possible purchase of the fashion brand, which is well-known for its gaudy ready-to-wear apparel created by the founder’s sister Donatella Versace, would enable Prada to establish a bigger Italian player to take on international luxury conglomerates like LVMH and Kering SA.
A turnaround will take some time, according to Capri, which also owns the Michael Kors and Jimmy Choo brands. The company has been having trouble reviving sales growth and last month gave revenue predictions that fell short of analysts’ projections.
