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Weeks after speculation swirled through the fashion world, Prada Group has confirmed its acquisition of Versace from Capri Holdings in a deal worth $1.375 billion. The transaction, which grants Prada 100 per cent ownership of the flamboyant Milanese house, will bring two of Italy’s most iconic luxury brands under one roof. The deal is expected to close in the second half of the year, pending regulatory approval. The acquisition marks Prada’s largest deal in its history. This unio
s union marks a significant consolidation in Italian fashion, reinforcing Prada Group’s status as a luxury powerhouse amid an increasingly unpredictable market. Yet, it also raises a thorny question: what happens when minimalism marries maximalism?
Of lace and leather
If Prada is admired for its intellectual minimalism, sharp tailoring, and quiet subversion, then Versace is its flamboyant counterpart, a celebration of baroque excess, sensuality and unapologetic glamour.
But bringing together two brands with such divergent aesthetics is no small feat.
Prada Group said in a statement that it has no intention of flattening Versace’s identity. Under the group’s ownership, Versace will maintain its creative DNA and cultural authenticity while benefitting from the full strength of Prada Group’s consolidated platform, including industrial capabilities, retail execution and operational expertise.
“There are no overlaps in terms of creativity, in terms of customers,” Lorenzo Bertelli, marketing director and a member of the family that controls Prada, told Reuters.
Patrizio Bertelli, chairman and executive director at Prada Group, said the company will provide Versace with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships.
The acquisition follows the announcement last month that Donatella Versace was stepping down as the chief creative officer of the brand founded by her late brother Gianni in 1978. Dario Vitale, the former design and image director of Miu Miu, will succeed Donatella as Versace’s new designer.
“Under Donatella’s leadership, Versace became synonymous with bold glamour, sensuality and unapologetic self-expression, an aesthetic that resonated deeply with its audience.” Daniel Langer, CEO of Équité, told Inside Retail. “Her successor, Dario Vitale, formerly of Miu Miu, represents a stark departure from this legacy.”
Langer warned that the stakes are high.
“Versace risks losing its distinctive voice by pivoting toward elegance and restraint. The brand has always celebrated boldness and sensuality. Moving away from this will without doubt undermine its emotional resonance with customers who see Versace as an inspiration and expression of radical confidence and self-expression,” Langer said.
Meanwhile, Mathew Dixon, partner at DHR Global, called the move a bold but challenging bet for Prada and said any revival of Versace would require a radical overhaul of its product and brand strategy.
“To move it forward, it will require a complete relaunch of the product architecture. There are no hero products, it doesn’t play successfully in footwear or accessories,” Dixon said.
Discount price
The timing of the acquisition is telling. The recent US tariff threats have helped push the price tag down by more than $200 million from earlier expectations and nearly 40 per cent below its 2018 price.
Capri Holdings, which also owns Michael Kors and Jimmy Choo, has framed the sale as a move to shore up its balance sheet and fuel the future growth of its existing portfolio.
Versace has been on shaky ground for some time. Capri Holdings, which purchased the brand for €1.85 billion in 2018, has struggled to deliver consistent growth. In the last quarter of 2024, Versace’s revenue fell 15 per cent year-on-year to $193 million. Losses are expected to continue through this year before the brand breaks even. Versace has a network of 230 owned boutiques and more than 400 licensed stores worldwide.
Meanwhile, the acquisition cements Prada’s position as a rare European challenger to the French-led dominance of the luxury sector, long orchestrated by conglomerates like LVMH and Kering.
While the global luxury market is experiencing a broad deceleration, especially in the US and China, Prada has defied the trend. Last year, it reported €5.4 billion in revenues, up 17 per cent year-on-year, and a 25 per cent jump in net income to €839 million, marking its fourth consecutive year of double-digit growth.
With ample cash on hand and rising investor confidence, Prada has the firepower and patience to nurse Versace back to strength. Whether that transformation can succeed, or whether Versace’s flamboyant soul will survive the union, remains to be seen.
Further reading: What Dario Vitale’s appointment means for Versace.
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