Prada and Ermenegildo Zegna Group agreed to buy an Italian cashmere producer, seeking to secure a domestic supply chain and luxury-goods manufacturing expertise.
The fashion brands will each own 40 per cent of Filati Biagioli Modesto, while the Biagioli family will get 15 per cent. The 5 per cent remaining will be owned by Renato Cotto, who will run the business. Filati Biagioli Modesto specializes in the production of cashmere as well as other "noble yarns".
Prada CEO Patrizio Bertelli will join the board of the cashmere company, while Gildo Zegna, CEO of the eponymous brand, becomes chairman of Filati Biagioli.
The investment highlights the importance of Italy as a hub for luxury craft. Burberry Group bought a leather-goods factory in Florence in 2018. Such investments can also help speed up production.
Luxury brands are seeking to improve the traceability and transparency of the materials used in their products amid growing awareness among consumers on matters ranging from animal welfare to workers' rights.