The Prada Group has finalized its acquisition of Milan fashion competitor Versace in a cash transaction valued at $1.375 billion US ($1.93 billion Cdn), bringing together the renowned fashion house recognized for its alluring designs with Prada’s “ugly chic” style and Miu Miu’s youthful appeal. The deal, which has been eagerly anticipated, is anticipated to reinvigorate Versace’s performance following a period of lackluster results under Capri Holdings, a U.S. luxury conglomerate.
Prada confirmed the completion of the acquisition after obtaining all necessary regulatory approvals. Capri Holdings, the parent company of Michael Kors and Jimmy Choo, announced that the proceeds would be utilized to reduce debt. Donatella Versace expressed her enthusiasm for the deal in an Instagram post, coinciding with the birthday of the brand’s late founder, Gianni Versace.
Lorenzo Bertelli, heir to Prada, will assume the role of executive chairman for Versace, in addition to his current positions as group marketing director and sustainability chief. While Bertelli does not foresee immediate executive changes at Versace, he acknowledges the brand’s historical underperformance in the market. Prada emphasizes the significant growth potential of the 47-year-old Versace brand.
The merger is seen as a harmonious blend of Prada’s minimalist approach with Versace’s maximalist style, as stated by Luca Solca, managing director at Sanford C. Bernstein research firm. Versace, which has faced challenges in remaining relevant, embarked on a creative rejuvenation under new designer Dario Vitale, who showcased his debut collection during Milan Fashion Week with positive feedback from buyers.
Capri Holdings’ acquisition of Versace for $2 billion US in 2018 struggled to align the brand with the trend of “quiet luxury.” Capri Holdings chairman John D. Idol believes Prada is the ideal partner to lead Versace into a new phase of growth. Versace contributed 20% of Capri Holdings’ 2024 revenue, and Prada anticipates Versace to represent 13% of its pro-forma revenues, with Miu Miu at 22% and Prada at 64%.
The Prada Group is already making arrangements to integrate Versace into its Italian manufacturing system, a move that underscores the group’s commitment to craftsmanship and quality. Bertelli highlighted the shared expertise in creating luxury goods across brands during a visit to the group’s leather goods factory in Scandicci, which currently produces bags for Prada and Miu Miu and will soon include Versace in its manufacturing lineup.