Prada Buys Versace for $1.4 Billion: A Bold Move in the Fashion World

In a groundbreaking deal, the Prada Group has announced its agreement to acquire rival fashion house Versace from Capri Holdings for a whopping 1.25 billion euros ($1.4 billion). The move will bring two of Italy’s most iconic fashion brands under the same roof—marking a new chapter for both companies.

Versace, famous for its daring designs and signature Medusa logo, will now join forces with Prada, the powerhouse known for its “ugly chic” aesthetic and the youthful energy of its Miu Miu brand. Prada executives see massive potential in Versace, citing the brand’s significant untapped growth opportunities.

Lorenzo Bertelli, Prada’s chief marketing officer and the future leader of the company, emphasized that there’s no overlap in terms of creativity or customer base between the two brands. He believes the iconic Versace name, which ranks among the top 10 most recognizable global brands, holds immense value far beyond its current business performance.

While the deal is valued at 1.4 billion euros, the final price will be adjusted when it closes later this year. The acquisition will be funded by a new 1.5 billion euro debt package. However, Prada is clear that the focus is not on immediate synergies, but rather on sustainable growth and reinforcing each brand’s distinct identity.

Prada’s CEO, Andrea Guerra, made it clear that Versace will retain its “creative DNA” and “cultural authenticity” after the acquisition, benefiting from Prada’s industrial capabilities and operational expertise. There are no plans for a leadership shakeup—Donatella Versace will stay on as the chief brand ambassador and won’t be involved in creative decisions.

Interestingly, the recent move to bring in Dario Vitale, Miu Miu’s design head, as Versace’s new creative director had nothing to do with the acquisition. Guerra clarified that Vitale’s appointment was an independent decision made by him.

Versace was acquired by Capri Holdings (the parent company of Michael Kors and Jimmy Choo) for $2 billion back in 2018. However, the brand struggled to position itself in the era of “quiet luxury” and had a hard time keeping up with changing fashion trends.

At the time of the acquisition, Versace contributed about 20% to Capri Holdings’ 2024 revenues, totaling 5.2 billion euros. In comparison, under the Prada Group, Versace will represent 13% of total revenues, with Miu Miu making up 22%, and Prada itself contributing the bulk at 64%. Prada Group’s total revenue jumped 17%, reaching 5.4 billion euros last year.

Donatella Versace, who took the helm of the brand after her brother Gianni Versace was tragically murdered in 1997, shared her excitement about the new chapter for Versace. On Instagram, she expressed her honor at having the brand entrusted to a trusted Italian family business, adding, “I am ready to support this new era for the brand in any way I can.”

The Italian government also welcomed the deal, seeing it as a step toward securing Versace’s future in Italy. Industry Minister Adolfo Urso praised the acquisition, calling it a victory for “Made in Italy.”

This historic deal between Prada and Versace marks a significant shift in the luxury fashion industry. With both brands staying true to their roots while seeking new growth, this collaboration promises to have a lasting impact on the fashion world. For fans of bold, sexy silhouettes and timeless luxury, the future of Versace under Prada’s leadership looks brighter than ever.

Source: AP News – Prada agrees to buy rival fashion house Versace in a deal valued at $1.4 billion