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Italian fashion group Prada is closing in the acquisition of Versace as negotiating a discount of more than $ 200m, due to the influence of US President Donald Trump’s trade war.
Prada and Capri Holdings, the owner of Versace, are set to announce a deal worth about $ 1.38BN as soon as possible on Thursday, according to people with direct knowledge of the talks. These people added that the price of the transaction, which was expected to agree with about $ 1.6BN, was renegotiated down in the last few days after market unrest and pressures that US tariffs were expected to settle in Versace’s business.
People warned that the time of notification of the deal could slip and small price adjustments can still be made. Capri’s chief executive John Idol is in Milan to complete the details with the Prada family, according to one of the people. Prada and Capri both refused to comment.
Capri’s action has fallen by more than a third since Trump announced comprehensive fees for global trading partners last week, reducing markets and reducing the total value of the group market to $ 1.5BN.
Capri, who also owns Jimmy Choo and Michael Kors, and the Prada group have been locked in exclusive negotiations for more than a month. Capri’s initial 3BN € and the future of Versace’s creative director Donatella Versace were two of the highlights of negotiations, according to people close to talks.
Last month, Donatella Versace withdrew after 30 years in the creator of her name label and was replaced by Dario Vitale, the director of the Miu Miu design, one of the brands of the Prada Group.
The measure was seen as a sign that both groups were approaching an agreement. However, the latest market riots and the immersion of Capri’s award threatened to disrupt the deal, two people near the talks said.
An agreement at cut prices means that Capri gets an even steep haircut in Versace, which he bought in 2018 from the Versace family with an enterprise value of 1.83bn €.
Versace’s brand capital has suffered from Capri’s decision to license many of its third -party products, including Luxottica and Euroitalia. Versace sales dropped by nearly 11 percent in its latest quarter and the brand currently operates with a loss.
The high aesthetics of Prada aesthetic and Versace’s maximum brand is seen as potentially complementary, but some industry interiors see Versace’s resumption as a complex task.
Vitale, who enjoyed success in Miu Miu along with founder Miuccia Prada, will have a duty to revive the label by making it more attractive to a new generation of luxury customers.
New York -based Capri has asked Versace for some time. The plan accelerated last year when a US court blocked a proposed $ 8.5BN union with Tapestry Rival, which owns Coach and other affordable luxury brands about competition concerns. She has also been entertaining interest from potential luxury shoe brand Jimmy Choo, according to people familiar with the situation, which she bought for $ 1.35bn in 2017.
Capri has faced challenges for both income and his benefit as brands throughout his portfolio fight in the midst of a luxury global slowdown, which has hit the aspirating segment its brands are particularly difficult. Michael Kors – which accounts for about 70 percent of group income – is poorly performing. An agreement would allow Capri to focus on the brand’s return as it cuts its debt.
