Prada has struck a $1.38 billion deal to acquire luxury fashion brand Versace from Capri Holdings, marking a significant move to unite two of Italy’s most iconic fashion names. This acquisition will see Prada expand its brand portfolio and tap into new customer segments, with Versace's bold and baroque-style designs complementing Prada’s minimalist aesthetic.
The merger strengthens Italy’s position in the luxury sector, which is currently dominated by French conglomerates such as Louis Vuitton owner LVMH. According to Prada Chairman Patrizio Bertelli, the acquisition provides Versace with a solid platform for growth, backed by years of investment and valuable industry relationships.
Despite the challenges posed by geopolitical risks, including uncertainty around U.S. tariffs, Prada and Capri proceeded with the deal. Capri, in turn, needed to divest Versace to refocus on its Michael Kors brand. For Prada, this acquisition is viewed as a long-term strategy to boost revenue and invigorate its portfolio as its core brands begin to mature.
The deal comes shortly after Donatella Versace announced her decision to step down as Chief Creative Officer, following a period of uncertainty about the brand's future. Donatella expressed her admiration for Prada’s leadership and her readiness to support the brand's new chapter.
Capri Holdings' shares hit after the announcement, falling 9% in New York and nearly 30% since the start of the year. Analysts noted that the deal’s valuation was significantly lower than the $2.15 billion (including debt) Capri paid for Versace in 2018 when the Versace family and private equity firm Blackstone sold the brand.
Prada has committed to raising 1.5 billion euros in new debt to fund the acquisition, expected to close in the second half of the year. This marks a significant shift in Prada’s strategy, with the acquisition of Versace being its first major deal in recent years. The move follows the appointment of Andrea Guerra as CEO, reflecting a broader change in leadership and the increasing influence of Lorenzo Bertelli, who is expected to take over as CEO in the future.
Founded in Milan in 1913, Prada expanded rapidly under the leadership of Miuccia Prada and Patrizio Bertelli, who also oversaw the growing Miu Miu brand and Church’s shoes. Versace, founded by Gianni Versace in 1978, is known for its opulent designs, including its famous Medusa head logo, and has become a symbol of bold Italian fashion.
The acquisition comes at a time when several high-profile deals have faced delays or cancellations due to global market uncertainty, including Tapestry's recent failed attempt to purchase Capri. However, for Prada, the acquisition of Versace represents a bold step forward in solidifying its position as a key player in the global luxury fashion industry.
