Son set to take over Prada’s billionaire empire says he’s open to buying other brands to bolster the 110-year-old family firm

Prada heir Lorenzo Bertelli has said he would consider taking over his 110-year-old brand.

“We have always been open to considering opportunities,” Prada’s second heir behind founder Mario Prada’s granddaughter recently told Bloomberg, while responding to questions about a rival’s future.

The 35-year-old then declined to comment, as 90-year-old Giorgio Armani raised eyebrows a few weeks ago by saying that he has not ruled out the idea of ​​eventually selling his eponymous brand.

Both have managed to remain independent and family-owned while establishing themselves as one of the most influential brands in global fashion.

Bertelli, Prada’s head of social responsibility, is the son of Miuccia Prada, Prada’s majority shareholder, and her husband Patrizio Bertelli, who each serve as co-CEOs.

In contrast, Armani owner Armani told Bloomberg last month that while he was hesitant, “independence from major groups could still be a driving value for the Armani Group in the future, but [he doesn’t] feeling [he] can rule out everything.’

That came from Italy’s second richest person, after the heir to the also family business Nutella, Giovanni Ferrero, 59. He has amassed some $6.6 billion in wealth over fifty years.

His company is still doing well and will reach approximately $2.6 billion in sales by 2022.

That said, the CEO has long dismissed talk of retirement and remained silent on the topic despite strong interest.

Under a succession plan, the brand he co-founded in 1975 would likely be passed on to his sister or three other family members who work in the company, as well as to Pantaleo Dell’Orco, a longtime employee.

With no children to pass it on to, there has been speculation about the long-term future of Armani’s impressive empire – as is the case with the world’s largest, LVMH.

Like Prada, the French fashion company is also a family business, still controlled by chairman and CEO Bernard Arnault, 75.

Four of his five children serve on LVMH’s board, and each is in the running to take the reins if he steps down.

However, family fashion houses are not known for their transparency, especially when it comes to succession planning.

And in an industry dominated by luxury conglomerates, there is speculation as to whether Armani will be able to do the same.

While there are no immediate plans for Armani to relinquish control, he said he is considering every option, including a takeover.

That said, Armani’s CEO succession plan has not been made public and is complicated by the presence of several capable lieutenants hidden within the company’s management.

As for Prada, the Bertellis still control around 80 percent of the company after reporting strong profit results in 2023, despite factors such as inflation affecting the luxury fashion industry.

On Tuesday, Lorenzo said he still plans to shape this and his future as the forces affecting luxury continue to surface and push him and others to adapt.

But Armani appears to be less confident in that approach, as the founder told Bloomberg last month that while it could help the brand grow, it could also lead to a shift in the brand’s values ​​and style.

“I currently do not foresee a takeover by a major luxury conglomerate,” he told the publication. “Listing is something we haven’t discussed yet, but it is an option that can hopefully be considered in the distant future.”

Meanwhile, many others, such as Berluti and Gucci, have been snapped up by conglomerates such as France’s LVMH and Kering, both of which are family-owned.

In 2001, Prada acquired a majority stake in brands such as Fendi, before selling it in 2005 to offset debt.

Six years later, in 2011, Prada went public on the Hong Kong Stock Exchange and raised billions in its initial public offering.

In the following decade, Prada focused more on e-commerce and digital marketing – adjustments that Armani was less successful at.

In 2020, the company has continued to shift its focus to sustainable fashion, introducing eco-friendly lines and sustainability goals.

Other shifts from tradition include an emphasis on innovation and global expansion, entering markets like Asia that are experiencing a luxury boom while big-box retailers are struggling.

Japan has emerged as an unlikely candidate for the world’s strongest luxury markets as a weaker yen attracted tourists looking for bargains and domestic demand remained solid.

The strong profits also seen at LVMH and Louis Vuitton were underpinned by growth in Japan.

Luxury sales in Asia also held up, defying an industry-wide economic downturn, while Chinese consumers exercised restraint – and growth slowed in other key markets.

This has affected companies like Armani, which had sales of $2.5 billion last year.

Armani, still CEO of his company at the age of 90, acknowledged the possibility of a takeover for the first time last month after repeatedly declining to comment on the matter the year before.