Prada Group, listed in Hong Kong, announced its 2024 financial results, showcasing a significant revenue increase driven by the outstanding performance of its subsidiary brand, Miu Miu. In a challenging year for the luxury goods sector, Miu Miu emerged as a standout performer with a remarkable 93.2% growth at constant exchange rates, achieving annual sales of over 1 billion euros for the first time.
Prada Group's overall revenue grew by 17% to 5.432 billion euros, outpacing luxury giants LVMH and Kering. Despite widespread industry speculation regarding a potential acquisition of Italian luxury brand Versace, Prada Group did not address this topic during its analyst meeting. Reports suggest that negotiations with Capri Holdings, the parent company of Michael Kors, are nearing completion.
If successful, the acquisition of Versace would bring Prada Group closer to its goal of becoming a leading luxury conglomerate. Currently, Prada Group's portfolio includes core brand Prada, Miu Miu, acquired British footwear brand Church's, and smaller brands like Car Shoe and Marchesi.
The luxury industry has seen frequent mergers and acquisitions, which do not always lead to market expansion and can sometimes become burdensome. Prada's past investments, such as Helmut Lang and Jil Sander, were eventually divested due to poor performance. As the fourth generation of the Prada family prepares to take over, the company is exploring new growth avenues through acquisitions.
Prada Group's CEO, Andrea Guerra, highlighted the company's strong performance across all brands in 2024, achieving double-digit same-store sales growth for four consecutive years. The group's financial stability is supported by increased profit margins and cash flow.
In the Asia-Pacific market, Prada Group's sales doubled from 2.423 billion euros in 2020 to 4.726 billion euros in 2023, driven by a robust recovery in China. The group ended the year with 609 directly operated stores worldwide.
As luxury brands like Coach's parent company Tapestry divest non-core assets, Prada sees potential in acquiring Versace. Both Italian family businesses, Versace's unique style could complement Prada's existing portfolio. Despite Versace's struggles under Capri Holdings, it remains influential in regions like the Middle East, a key growth area for luxury brands. Prada's sales in Japan and the Middle East increased by 45.8% and 26.0% respectively last year.
Prada Group is reportedly negotiating with Capri Holdings to acquire Versace and Jimmy Choo, with a potential deal valued at 2 billion euros. If completed, this would be one of the most notable transactions in the luxury sector in recent years.
