Prada Acquires Versace: A Bold Move in Luxury Fashion
Italian fashion house Prada announced on Thursday, April 10, that it has reached an agreement with US group Capri Holdings to purchase its glamorous rival, Versace, for a staggering $1.25 billion. This acquisition is set to form a new luxury powerhouse, yielding revenues exceeding $6 billion, enabling it to better contend with leading players in the industry, such as French conglomerates LVMH and Kering amid a global slowdown in luxury goods sales.
Prada Group Chairman and Executive Director, Patrizio Bertelli, expressed his enthusiasm, stating, "We are delighted to welcome Versace to the Prada Group and to build a new chapter for a brand with which we share a strong commitment to creativity, craftsmanship, and heritage."
In 2018, Capri Holdings acquired Versace for $2.12 billion, having purchased 80% from the Versace family and 20% from the US investment firm BlackRock. However, amid declining sales, Capri decided to put Versace on the market, entering exclusive negotiations with Prada at the end of February. Reports from the Financial Times suggest that Prada negotiated the price down from an expected $1.6 billion due to the ongoing market turbulence exacerbated by US tariffs under former President Donald Trump.
The acquisition comes on the heels of significant changes at Versace, particularly with the departure of long-time creative director Donatella Versace. After leading the brand for over 30 years, she stepped down from her position and was succeeded by Dario Vitale, who previously oversaw robust sales growth at Miu Miu, Prada's sister brand catering to a younger audience. Donatella, who will turn 70 in May, remains with Versace as its chief brand ambassador.
Despite its stature as a brand synonymous with glamour and luxury, Versace has faced challenges recently, reporting $193 million in revenue for its fiscal third quarter of 2025, a decline of 15%. Conversely, Prada is experiencing solid growth, with net profits soaring by 25% to $839 million in 2024 and revenues increasing by 15% to €5.4 billion. Andrea Guerra, Prada Group's CEO, noted the potential for Versace but cautioned that revitalizing the brand would require a long-term commitment and careful strategy, stating, "The journey will be long and will require disciplined execution and patience. The evolution of a brand always needs time and constant focus."
The ambitious deal, financed through $1.5 billion in new debt, is anticipated to close in the latter half of 2025. This strategic move marks a significant shift in the competitive landscape of luxury fashion, setting the stage for a potential resurgence for both Prada and Versace.
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