Italian luxury fashion house Prada is considering a bid for high-end fashion house Versace, according to a report by daily publication Il Sole 24 Ore. 

It notes that Prada is collaborating with consulting firm Citi to evaluate the potential transaction.

It remains unclear whether Prada maintains an active interest or is still assessing the opportunity to place an offer for Versace. 

The report follows after Capri Holdings, the parent company of Versace, engaged Barclays to assess strategic alternatives for its fashion brands, which include Jimmy Choo, as reported by Reuters. 

This development follows the cessation of a proposed merger between Capri and Tapestry, valued at $8.5bn in November 2024, after a legal injunction halted the process amid regulatory concerns. 

Following the collapse of this deal, Capri's leadership did not dismiss the notion of selling off its brands. 

Capri, which also owns Michael Kors, has experienced a downturn in sales within the $400bn luxury sector.  

The company attributed the decline to reduced expenditure by affluent Chinese consumers and the conclusion of a sustained period of industry growth.

Versace designs, manufactures, distributes and retails fashion and lifestyle products such as accessories, haute couture and jewellery. It is led by Italian fashion designer and businesswoman Donatella Versace. 

For the fiscal year ending 30 March 2024, Versace contributed to one-fifth of Capri's revenue. It witnessed a decline in revenues, however, from $1.1bn to $1.03bn, compared to the previous year. 

The brand’s operating margin contracted from 13.7% to 2.4%.