Italian luxury fashion house Prada Group has successfully acquired its Milanese counterpart, Versace, in a cash deal worth $1.375 billion in the United States ($1.93 billion in Canadian dollars). This acquisition brings together Versace’s reputation for alluring designs with Prada’s distinctive “ugly chic” style and Miu Miu’s youthful appeal.
The purchase, which has been eagerly anticipated, is seen as a strategic move to revitalize Versace’s performance following a period of lackluster results under its previous ownership by U.S. luxury group Capri Holdings. Prada confirmed the completion of the acquisition after obtaining all necessary regulatory approvals, while Capri Holdings announced plans to utilize the proceeds to reduce its debt.
Donatella Versace expressed her enthusiasm for the deal in an Instagram post coinciding with the birthday of her late brother and the brand’s founder, Gianni Versace. She fondly mentioned the joining of Versace with the Prada family, imagining the joy it would have brought him.
Under the new leadership, Prada’s heir Lorenzo Bertelli will assume the role of executive chairman at Versace. Despite acknowledging the brand’s historical significance, Bertelli aims to address its underperformance in the market by tapping into its untapped growth potential. The merger of Prada and Versace is deemed appealing as it combines the minimalist aesthetic of Prada with Versace’s maximalist approach, targeting different segments of customers.
Versace has already embarked on a creative resurgence with the appointment of designer Dario Vitale, who showcased a vibrant collection at Milan Fashion Week. While the show received mixed reviews, buyers responded positively to the colorful and nostalgic designs, indicating a promising start for the brand’s rejuvenation.
Capri Holdings, which previously acquired Versace for $2 billion in 2018, struggled to align the brand with the trend of understated luxury. The partnership with Prada is viewed as a strategic move to propel Versace into a new phase of growth. Versace accounted for a significant portion of Capri Holdings’ revenue in 2024, making it a valuable asset in the luxury market.
Prada Group is gearing up to integrate Versace into its existing Italian manufacturing system, leveraging its expertise in producing high-quality leather goods. This integration is seen as a step towards enhancing efficiency and synergy within the group’s portfolio of luxury brands.
