Prada managed to raise its net profit by a quarter in 2024, despite cooling demand for luxury goods in China. The Italian fashion house is still looking to take over Versace, but it might not stop there.
Facing weakened competition
The declining interest of Chinese consumers in Western luxury goods and a deteriorating Chinese economy cause many luxury brands to face turnover drops, such as LVMH and Gucci. On the other hand, Prada is still managing to grow: its subsidiary Miu Miu even almost doubled its sales, thanks to a growing popularity among young consumers.
Prada’s sales rose 15 % to 5.4 billion euros, while its net profit rose 25 % to 839 million euros last year. Japan was the strongest performing market with a 46 % increase in sales, while Europe recorded an 18 % growth, helped by tourists. Overall, retail sales totalled 4.8 billion euros (+ 18 %).
Jimmy Choo heading to Prada too?
The Italian fashion house is still looking to acquire Versace from US-based Capri Holdings: according to Bloomberg, the deal could be completed this month. Versace’s owner is struggling with declining performances and is reportedly open to a sale that would earn it a very welcome 1.5 billion euros. Capri still paid 1.8 billion euros for Versace in 2018, 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. Prada may even push it one step further: according to Italian newspaper Corriere della Sera, Prada would also like to purchase Jimmy Choo from Capri.
