The acquisition of Milan’s renowned fashion brand, Versace, by the Prada Group has been successfully completed in a cash deal worth $1.375 billion US ($1.93 billion Cdn). This transaction brings together Versace’s reputation for alluring designs with Prada’s distinctive “ugly chic” style and Miu Miu’s youthful allure.
The purchase is seen as a strategic move to revitalize Versace’s performance following a period of underwhelming results under the ownership of U.S. luxury group Capri Holdings. The completion of the acquisition, after obtaining all necessary regulatory approvals, was confirmed by Prada in a brief statement. Capri Holdings intends to utilize the proceeds to reduce its debt burden.
Donatella Versace expressed her approval of the deal in an Instagram post commemorating the birthday of her late brother and the brand’s founder, Gianni Versace. She welcomed Versace into the Prada family and shared a sentimental message alongside a throwback photo of Gianni Versace with Miuccia Prada from 1996.
Lorenzo Bertelli, the heir to Prada, will assume the role of executive chairman at Versace while maintaining his positions as group marketing director and sustainability chief. He emphasized a gradual approach to any operational changes at Versace, acknowledging the brand’s historical significance despite recent market challenges. Prada sees substantial growth potential in the 47-year-old Versace label.
The synergy between Prada’s minimalistic style and Versace’s maximalist approach is deemed advantageous by industry experts, as it avoids direct competition for clientele. Versace is undergoing a creative renaissance under new designer Dario Vitale, who unveiled his inaugural collection during Milan Fashion Week, drawing positive feedback from buyers for its vibrant interpretation of 1980s fashion.
Following Capri Holdings’ acquisition of Versace for $2 billion US in 2018, the brand faced difficulties aligning its bold image with the prevailing trend of understated luxury. Prada’s chairman, John D. Idol, expressed confidence in Prada’s ability to guide Versace towards sustainable growth.
Versace contributed significantly to Capri Holdings’ 2024 revenue, accounting for 20% of the total 5.2 billion euros ($8.4 billion Cdn). Prada expects Versace to represent 13% of its pro-forma revenues, with Miu Miu and Prada constituting 22% and 64%, respectively. The Prada Group, inclusive of Church’s footwear, reported a 17% revenue increase to 5.4 billion euros ($8.8 billion Cdn) in the previous year.
Preparations are underway for Versace’s integration into Prada’s Italian manufacturing system, a move that underscores the group’s commitment to quality craftsmanship. Bertelli highlighted the shared expertise in producing luxury goods across Prada, Miu Miu, and soon, Versace, at the group’s Scandicci leather goods factory.