Changes in Hong Kong stocks | Prada (01913) fell more than 8%, and the company spent $1,375 billion to buy all Versace, which may drag down profit margins for the next two years

The Zhitong Finance App learned that Prada (01913) fell by more than 8%. As of press release, it fell 7.24% to HK$45.45, with a turnover of HK$305.581 million.

According to the news, Prada recently announced that it plans to acquire Italian fashion brand Versace (Versace) at a price of 1,375 billion US dollars. According to Capri Group's 2024 fiscal year report, Versace's revenue was $1.03 billion, down 6.9% year over year, and profit margin was only 0.4%. In the third quarter of fiscal year 2025, Versace's sales declined sharply, dragging down Capri Group's third-fiscal quarter revenue by 11.6% year-on-year, with a net loss of $547 million after accounting for non-cash impairment charges.

Macquarie released a research report saying that the acquisition of Versace will dilute Prada's EBIT profit margin for the current and next two years, and gradually recover from the second half of next year. The bank lowered Prada's net profit forecast for this year and next by 6% and 5%, respectively, to take into account the impact of the acquisition of Versace and cut its target price by 25% to 66 yuan, rating it “outperforming the market.” HSBC, on the other hand, said that considering macroeconomic uncertainty and doubts about luxury goods, the timing and price of the purchase proved to be very good, and the initial reaction of the market became one of concerns.