Prada Acquires Versace for $1.375 Billion
MILAN — Prada Group has finalized its acquisition of Versace, a well-known Milanese fashion brand, in a cash deal valued at $1.375 billion. This move brings together Versace’s bold, sensual designs with Prada’s distinctive “ugly chic” style and Miu Miu’s youthful vibe.
The anticipated purchase is seen as a way to rejuvenate Versace’s brand, which has been struggling, especially within the context of Capri Holdings—an American luxury goods group that has seen modest recovery since the pandemic.
Prada announced that the acquisition has gone through all necessary regulatory approvals. Capri Holdings, which also owns Michael Kors and Jimmy Choo, mentioned that the funds will help reduce their debt.
Donatella Versace expressed her happiness about the acquisition in an Instagram post, which coincidentally fell on the birthday of her late brother, Gianni Versace, who founded the brand.
In her emotional post, she remarked, “Today is your day and the day Versace joins the Prada family. I wonder how you would have smiled.” She included a nostalgic photo from 1979 featuring Gianni Versace alongside Miuccia Prada.
The Future of Versace
Lorenzo Bertelli, the successor at Prada, will take on the role of executive chairman at Versace, alongside his duties in marketing and sustainability for the group.
Though there are currently no immediate plans for executive restructuring at Versace, it’s clear that the brand has been underperforming in the highly competitive market.
Prada highlighted the significant growth opportunities that the 47-year-old Versace brand harbors.
Under the leadership of its new designer Dario Vitale, who recently unveiled his first collection during Milan Fashion Week, Versace looks to undergo a creative transformation. Vitale previously worked as the head of design at Miu Miu, but his transition to Versace isn’t necessarily linked to the acquisition.
Capri Holdings had purchased Versace for $2 billion back in 2018 but has faced challenges in positioning the brand amid a rising trend toward “quiet luxury.”
Capri Holdings Chairman John D. Idle stated that “Prada is the ideal partner to lead this storied luxury brand into its next era of growth.”
For 2024, Versace accounted for 20% of Capri Holdings’ revenue, which totaled 5.2 billion euros.
When the partnership was first discussed in April, Prada projected that Versace would contribute roughly 13% to its estimated revenue, with Miu Miu at 22% and Prada itself making up 64%. The Prada Group, which includes Church’s shoes, saw a 17% sales increase last year, reaching 5.4 billion euros.
Prada’s Manufacturing Plans
Prada is already working on integrating Versace into its renowned Italian manufacturing network.
“Regardless of the brand of bags we produce, the craftsmanship remains consistent,” Bertelli told reporters during a visit to their leather goods factory in Scandicci, which currently produces for Prada and Miu Miu, and will soon include Versace products.
Inside the factory, artisans were engaged in sewing and cutting leather with precision tools, while trainees participated in a hands-on career development program. Last year, roughly 70% of the 120 artisans trained at the academy were employed by Prada. This year, the number of trainees has jumped by 28% to a total of 152.
Prada is investing €60 million in its supply chain this year, which includes a new leather goods factory near Siena and a knitwear facility near Perugia, in addition to expanding existing production sites. This is part of a broader €200 million investment plan set between 2019 and 2024.
