Wave of restructuring spreads in the luxury goods industry

VTV.vn - Mergers and portfolio adjustments are showing strategic shifts of many large corporations in the luxury sector.

Luxury conglomerates are pushing to restructure their brand portfolios.

A high-profile merger that is shaking up the luxury fashion industry is Italian luxury fashion house Prada, which has just completed its acquisition of fellow Italian brand Versace. This deal is continuing to consolidate the portfolio restructuring activities of luxury groups in recent times.

In a recent announcement, Versace has officially transferred ownership from the American group Capri to Prada for a price of approximately 1.25 billion Euros. According to experts, despite significant differences in philosophy, Versace will add to Prada's portfolio an iconic and heritage brand, with the potential to bring long-term revenue growth alongside the company's current brands.

Mr. Luca Solca - Analyst, Bernstein Market Research Company said: "After many years of not participating in M&A, Prada now owns one of the most famous fashion brands in Italy. I think it will be interesting to follow how they will operate and complement the two brands, because Prada is highly minimalist, while Versace has a completely different positioning, focusing on outstanding luxury."

The deal is also significantly lower than what Capri paid for Versace in 2018. However, this will help the American group rebalance its finances and implement a strategy to focus on core brands such as Michael Kors. Meanwhile, Prada aims to consolidate Italy's position in the luxury market, which is dominated by French names such as LVMH and Kering.

"Versace is a brand that has gone through its heyday and the challenge but also the opportunity here is how to innovate to make it attractive again while still connecting to its heritage," said Luca Solca, analyst at Bernstein.

This year, the luxury goods sector also witnessed another high-profile deal: the Kering group sold its cosmetics division to L'Oreal. Similar to Capri, Kering decided to withdraw from this sector after 2 years of ineffective investment, in order to refocus on core brands such as Gucci.

In the context of the global luxury goods market generally showing signs of slowing down, these deals are seen as a signal of restructuring by the names to strengthen long-term business strategies amid current fluctuations.

Source: https://vtv.vn/lan-song-tai-cau-truc-lan-rong-trong-nganh-hang-xa-xi-100251204082934135.htm