Will Prada’s acquisition of Versace reshape fashion or is it a deal that Prada group will end up regretting like Capri Holdings?
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Prada Group has agreed to acquire Versace from Capri Holdings for €1.25 billion ($1.38 billion), after negotiating a discount of more than €200 million due to the impact of US president Donald Trump’s trade war.
Prada, which is financing the transaction with new debt, is borrowing an additional €250 million to invest in relaunching Versace, which turned loss-making last year as it struggled to keep up with bigger heritage brands amid a global downturn in luxury sales.
The deal is going ahead despite a global market rout sparked by Trump’s trade policy, which risks hammering demand for high-end products in addition to clouding the outlook for fashion’s global supply chain. Shares in Michael Kors and Versace parent Capri tumbled 36 percent in a week, before partially recovering Wednesday after Trump announced a pause on the heftiest tariffs on imports from all countries except China.
In spite of a volatile market that is likely to pinch both strong brands like Prada and struggling rivals like Versace, Prada Group decided not to pass up the chance to add one of Italy’s most famous brands to its stable.
The deal is expected to close in the second half of 2025.
Turning around Versace, whose business has never matched the power of its brand, will be a challenge for the group controlled by Miuccia Prada and her husband Patrizio Bertelli, but could provide a new avenue for growth beyond its flagship Prada brand and Miu Miu sister label, as well as help to fend off consolidation by French groups LVMH and Kering.
“This is a brand with a huge potential, a strong heritage and a very recognisable aesthetic,” group chief marketing officer Lorenzo Bertelli said in a call following the announcement.
Prada Group CEO Andra Guerra emphasised that Versace’s relaunch would be a “very long-term” effort, but expressed confidence in achieving “sustainable growth” after onboarding its “brand, image, products, stores and people” to Prada Group’s industrial platform and corporate structure.
Versace’s estimated revenues fell 19 percent to $810 million in the fiscal year through March, Capri said. That’s roughly in line with the size of the business when the American group acquired it for $2.1 billion in 2018. The brand is hoping to break even by March 2026 after operating margins swung to a high single-digit loss over the past year.
Last month, Versace named a new artistic director hired from Prada’s Miu Miu label, Dario Vitale, to help revamp its collections. Vitale is a seasoned operator whose fresh creative vision could revive interest in a brand that’s been designed by former creative director Donatella Versace since 1997.
On the other hand, industry sources say the designer’s exit from Prada Group was fraught. And Vitale’s appointment could raise concerns among executives that his Versace will cannibalise sales of fast-growing Miu Miu.
Asked whether the group was pleased to reunite with Vitale as a trusted pair of hands leading Versace, Guerra declined to comment, expressing his eagerness to work with “all of Versace’s people.” The fate of the brand’s current CEO, Emmanuel Gintzberger, also remains unclear, as Guerra confirmed only that the company would “start” its Versace journey with him.
The deal will test recent efforts to financialise and professionalise Prada’s governance and operations. Over the past five years, the Milan-based firm has sought to accelerate its succession plans, bringing in a new CEO, CFO and deputy chairman as founders Prada and Bertelli relinquished their co-CEO titles. The group fast-tracked the career of the couple’s heir apparent, Lorenzo, who has taken on the role of group CMO in addition to serving as head of corporate responsibility and social responsibility and on the company’s board.
Star designer Raf Simons joined the company as co-creative director of Prada, alongside Miuccia Prada, in 2020.
“Our organisation is ready and well positioned to write a new page in Versace’s history,” chairman Patrizio Bertelli said in a statement.
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