Milan: Italian fashion house Prada announced on Thursday that it has finalized an agreement with US group Capri Holdings to purchase its flamboyant rival, Versace, for €1.25 billion ($1.38 billion). This acquisition is a strategic move as Prada acquires Versace for growth, forming a luxury group with revenues exceeding €6 billion that can better compete against leading industry players like French giants LVMH and Kering, particularly during a global slowdown in the sector.
“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,” said Patrizio Bertelli, chairman and executive director of Prada Group, in a statement.
In 2018, Capri acquired Versace for €1.83 billion (then $2.1 billion), with the brand previously owned 80 percent by the Versace family and 20 percent by US investment fund BlackRock. Facing declining sales, the Milan-based label put Versace up for sale, entering exclusive negotiations with Prada at the end of February.
Capri, which also owns Jimmy Choo and Michael Kors, had to accept a lower price from Prada due to market uncertainties exacerbated by US President Donald Trump’s tariffs. The Financial Times reported that the initial price was anticipated to be around $1.6 billion but was negotiated downward in recent days.
Last month, Donatella Versace stepped down as creative director after over 30 years, a move widely interpreted as a precursor to the agreement. She took over the role in 1997 following the murder of her older brother Gianni, the label’s founder in 1978. On April 1, she was succeeded by Dario Vitale, who has driven impressive sales growth at Miu Miu, Prada’s sister brand aimed at younger consumers. Donatella Versace, who will turn 70 in May, now serves as the chief brand ambassador for the label.
Long Journey Ahead
Versace, still a brand synonymous with the jet set, has seen some of its shine diminish in recent years. The label reported $193 million in revenue in its fiscal 2025 third quarter, a decrease of 15 percent. In stark contrast, Prada, under the creative leadership of Miuccia Prada, the 76-year-old granddaughter of founder Mario, remains robust. Despite a global slowdown in luxury sales, Prada’s net profit soared by 25 percent to €839 million in 2024, with revenues increasing by 15 percent to €5.4 billion.
Andrea Guerra, Prada’s group CEO, remarked on Thursday that Versace holds “huge potential,” but acknowledged that revitalizing the brand will require effort. “The journey will be long and will require disciplined execution and patience. The evolution of a brand always needs time and constant focus,” he stated.
The deal, financed through €1.5 billion in new debt, is set to close in the second half of 2025.
A Complementary Addition
Prada and Versace present markedly different aesthetics, with Versace’s exuberance contrasting with Prada’s sophisticated minimalism. Prada described the acquisition as “a strongly complementary addition” to its portfolio, noting that Versace will “maintain its creative DNA and cultural authenticity,” while benefiting from Prada’s “industrial capabilities, retail execution, and operational expertise.”
This deal represents a departure from recent trends where major Italian fashion names like Gucci, Fendi, and Bottega Veneta have come under French ownership. “Prada will be able to bring light back into a brand that was dying and infuse it with new life,” said design consultant Antonio Bandini Conti.
However, past attempts to expand the Prada portfolio, which includes luxury footwear brands Car Shoe and Church’s, serve as a cautionary tale. In 1999, the family group acquired the German brand Jil Sander and the Austrian label Helmut Lang, only to sell them in 2006 as they negatively impacted its financial performance. In 2000, Prada also jointly acquired a 51 percent stake in the Roman label Fendi with LVMH but sold its 25.5 percent stake to the French luxury conglomerate a year later.
