Prada has officially announced its acquisition of Versace, bringing two iconic Italian luxury fashion houses under one roof. The deal, valued at $1.38 billion (£1.04 billion), is significantly below the approximately $2 billion that Capri Holdings, Versace’s former parent company, paid for the brand in 2018.
This acquisition broadens Prada’s portfolio of designer brands, which includes Miu Miu, as it seeks to compete with global rivals such as LVMH, owner of Dior, Fendi, and Louis Vuitton.
A Change in Creative Leadership
Storied designer Donatella Versace stepped down as creative chief in March after 27 years at the helm. Donatella took over the company in 1997 following the tragic murder of her brother, Gianni Versace. She was succeeded by Dario Vitale, formerly design director at Miu Miu, Prada’s youth-focused luxury brand.
A Strategic Acquisition at a Discount
The deal represents a roughly $700 million loss for Capri Holdings, which also owns brands like Michael Kors and Jimmy Choo. Versace experienced slowed sales during Capri Holdings’ ownership and shifted from its traditional ornate designs toward a more minimalist aesthetic while increasing prices.
Prada confirmed on Tuesday that the acquisition has been successfully completed, having received all necessary regulatory approvals.
Financial Implications for Capri Holdings
Proceeds from the sale will allow Capri Holdings to reduce its debt significantly. CEO John D. Idol stated, “We plan to use the proceeds to repay the majority of our debt, which will substantially strengthen our balance sheet.”
Prada’s Vision for Versace
Prada CEO Andrea Guerra highlighted the potential of the newly acquired brand, saying earlier this year that Versace has “huge potential” and emphasizing that “the journey will be long and will require disciplined execution and patience.”
This landmark acquisition marks a significant moment in the Italian luxury fashion sector, uniting two powerhouses and promising exciting developments for global fashion enthusiasts.
