Luxury Briefing: Is Prada’s rumored acquisition spree smart for the booming business?

“This simplifies Capri’s structure,” said Ariel Ohana, managing partner of Ohana & Co., a boutique M&A advisory firm. “They can either double down on Michael Kors or pivot toward acquiring smaller, more agile brands that don’t rely on struggling luxury department stores.”

For Prada, the deal would come on the back of strong full-year 2024 earnings. The company posted €5.4 billion ($5.85 billion) in revenue, up 17% at constant exchange rates, with €1.28 billion ($1.39 billion) EBIT and a 23.6% margin. “We are happy with these results, and even happier with the strong foundations we’ve built for future growth,” said Prada Group CEO Andrea Guerra during the company’s March 5 earnings call​.

“This move feels off-brand for Prada,” said Christopher Morency, fashion brand strategist. “They’ve spent the last few years repositioning themselves toward classiness, everyday wear and quiet luxury. Versace, on the other hand, is about opulence, sex appeal and celebrity culture. It’s a completely different aesthetic and price positioning.”

For example, in its latest runway collection at Milan Fashion Week, Versace showed baroque motifs, jeans and Western-style collars, miles away from Prada’s more refined aesthetic.

Prada is investing in other areas, as well. On the earnings call, Guerra emphasized that the company is aggressively investing in retail, digital and manufacturing, including renovating its store network and expanding in the U.S. and China. Prada is also looking to increase profitability per store, shifting focus from simply expanding square footage to creating high-performing flagship locations that drive traffic both in-store and online.

If Prada wants to compete with LVMH and Kering, it will need to expand its brand portfolio beyond just Versace and further diversify, Ohana said.

Guerra left the door open for more acquisitions on the call. “You never decide when things come around,” he said. “But when they do, you always look at them.” With whispers also swirling about Prada’ eyeing’s interest in Jimmy Choo, this deal may be just the first step toward a bigger Prada Group.

Earnings: On’s luxury play

On Running’s recent fashion-focused moves are paying off. On March 4, the company reported 29.4% revenue growth in the fourth quarter of 2024, hitting CHF 2.3 billion ($2.64 billion), while its direct-to-consumer share reached a record 48.8%.

“In cities like Paris and Milan, we’ve seen a significant increase in regional brand awareness, proving that a physical presence drives digital momentum,” said On’s co-CEO Martin Baumann​ on the earnings call.

On opened flagships on the Champs-Élysées in December 2023 and in Milan’s Galleria Vittorio Emanuele II, traditionally reserved for high-end fashion houses, early last year.

“The store is one of the most important touchpoint because people spend time in them — it’s an opportunity to deliver what we call ‘reasons to believe,’” said Eric Falardeau, partner at McKinsey. “They’re not just spaces to shop; they’re also about reinforcing a brand’s emotional benefits, which is critical in this category.”

In January 2024, On first partnered with luxury designer brand Loewe for a limited-edition capsule collection — it blended On’s technical performance expertise with Loewe’s luxury craftsmanship. In addition, the brand is hosting a Selfridges shop-in-shop in January and using celebrity-backed campaigns to position itself alongside legacy brands​. 

“We started with Roger Federer four years ago, and now Zendaya is the voice of the next generation for On,” Baumann said on the call. “This is just the beginning of our partnership. It’s built for the long haul.”

While On is still best known for its high-performance running shoes, it’s clear the brand has bigger ambitions. In 2024, it launched an apparel collection with Loewe, which leveraged fashion-forward silhouettes and premium materials and sold for $500-$990 range. Its standard apparel range is priced $80-$300.

“There’s been a cultural shift in how people view performance apparel,” said Falardeau. “It’s no longer just about function — it’s about aspiration. On is walking that fine line between performance and prestige, and that’s what’s resonating with consumers.”

Smart glasses, take two: Will Luxottica get it right this time?

EssilorLuxottica is bringing smart eyewear back to the market with its Nuance Audio brand. Its first product launched in the U.S. in February and is getting positive reviews, said Davide D’Alena, global marketing director for Nuance Audio at EssilorLuxottica, citing early customer feedback. Its wellness and accessibility focuses are resonating.

“This is a functional product, designed to address mild-to-moderate hearing loss,” said D’Alena. “Our main customer is 50 and up, which means we’re prioritizing wellness and health markets over fashion positioning.”

Unlike previous smart glasses lines, like Ray-Ban x Meta, Nuance Audio isn’t centered on sleek design or social media appeal. Instead, the company is hyping its FDA-approved hearing enhancement technology in a light eyewear frame. The frame features integrated directional microphones and discreet speakers in the temples that enhance speech clarity and amplify sound while minimizing background noise. The brand is in 10,400 retail locations and expanding into audiology clinics, aiming to bridge the gap between medical devices and wearable tech. “We’re pushing hard on key opinion leaders,” D’Alena said. “Doctors, hearing specialists — people who give the product legitimacy.”

Luxottica’s previous smart eyewear attempts struggled to break past the early adopter phase because of a lack of customer adoption.

Luxottica’s Ray Ban x Meta glasses have been taking off, selling 2 million units last year as consumer trust grows – some blind consumers have noticed the benefits of wearing them, as well. With hearing health now a key part of the longevity trend, Luxottica is now betting on a market that has real demand but little competition.

“There’s strong evidence linking untreated hearing loss to cognitive decline,” D’Alena added, quoting data from the National Institutes of Health. “Our goal is to break adoption barriers — stigma, price, discomfort — while maintaining a design people actually want to wear.”

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