Prada finalizes purchase of fashion rival Versace for $1.4 billion, launching new era

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Category: Business

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Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. clearance / ˈklɪər əns / (n.) – permission or approval to do something, especially from an authority
    Example:

    The project involves sensitive information, so several security clearances are needed before we can start.


  2. swift / swɪft / (adj.) – quick or happening very fast
    Example:

    We need a swift response because the situation is urgent.


  3. underperform / ˌʌn dər pərˈfɔrm / (v.) – to do worse or earn less than expected, or to not do as well as others
    Example:

    Our product is underperforming compared to similar products on the market.


  4. untapped / ʌnˈtæpt / (adj.) – not used yet, not developed, or not taken advantage of
    Example:

    The country has many untapped natural resources.


  5. heyday / ˈheɪˌdeɪ / (n.) – the time when someone or something was at its best, strongest, most successful, or most popular
    Example:

    In its heyday, the company was the most successful in the country.


Article

Read the text below.

The Prada Group has closed the purchase of Milan fashion rival Versace in a $1.375 billion cash deal that puts the fashion house known for its sexy silhouettes under the same roof as Prada’s “ugly chic” aesthetic and Miu Miu’s youth-driven appeal. The highly anticipated deal is expected to relaunch Versace’s fortunes after middling post-pandemic performance as part of the U.S. luxury group Capri Holdings.


Prada said in a one-line statement that the acquisition had been completed after receiving all regulatory clearances. Capri Holdings, which owns Michael Kors and Jimmy Choo, said the money would be used to pay down debt.


Donatella Versace welcomed the deal in an Instagram post, which also marked the birthday of the brand’s late founder, her brother, Gianni Versace. “Today is your day, and the day Versace joins the Prada family. I am thinking of the smile you would have had on your face,’’ she wrote in a post that also featured a 1979 photo of Gianni Versace with Miuccia Prada.


Prada heir Lorenzo Bertelli is set to steer Versace’s next phase as executive chairman, in addition to his roles as group marketing director and sustainability chief. The son of co-creative director Miuccia Prada and longtime Prada Group chairman Patrizio Bertelli has said he doesn’t expect to make any swift executive changes at Versace, although he also noted that the company, which is among the top 10 most recognized brands in the world, has long been underperforming in the market.


Prada has underlined that the 47-year-old Versace brand offered “significant untapped growth potential.’’


The appeal of the deal is that it combines “the minimalist Prada (with) a maximalist Versace,” said Luca Solca, an analyst at the Bernstein Group consulting firm, meaning that the brands don’t compete for the same customers.


Versace is “long past its heyday,” Solca continued. “The challenge and the opportunity is to make it relevant again… They are going to have to invent something which is going to make the brand attractive, desirable, and interesting again.”


This article was provided by The Associated Press.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • An analyst said Versace is “long past its heyday” and must find a way to become desirable again. What do you think makes a brand feel “fresh” or “exciting” after many years? In your opinion, can something that was once very famous ever fully regain its old popularity? Why do you say so? Discuss.
  • Versace is described as one of the top 10 most recognized brands, yet it has been underperforming in the market. Why do you think a brand can be famous but still financially weak? Do you think popularity can ever become a problem for a company? Why or why not? Discuss.

Discussion B

  • Experts say Versace must “invent something” new to become attractive and interesting again. In your opinion, what qualities make a “new idea” convincing and not just a trend? Have you ever reinvented yourself in some way—your style, habits, or goals? What inspired the change? Discuss.
  • The appeal of the deal is that it combines “the minimalist Prada (with) a maximalist Versace,” said Luca Solca. Which of the two styles do you like more, minimalist or maximalist? Why? What do you think would be the result of Prada and Versace combining these two styles? Discuss.