Prada has proclaimed a landmark agreement to procure its rival, the esteemed Italian fashion establishment Versace, from Capri Holdings, in a transaction appraised at $1.375 billion, inclusive of assumed liabilities.
This strategic maneuver, validated on Thursday, April 10, signifies a substantial consolidation within the luxury fashion sector in Italy and enhances Prada’s capacity for influence in a marketplace that has historically been governed by French conglomerates.
The acquisition transpires amidst disparate trajectories for the two fashion behemoths. Whereas Prada has successfully navigated recent downturns in luxury demand with consistent growth, Versace has encountered considerable financial adversities. This merger is poised to afford Versace a revitalized opportunity for resurgence under the stewardship of one of Italy’s most distinguished luxury entities.
The transaction ensues subsequent to the announcement on March 13 regarding Donatella Versace’s resignation as chief creative officer, thereby concluding a significant era for the brand established by her deceased brother, Gianni Versace. This departure lays the groundwork for a transformative phase in the brand’s ongoing evolution.
“We aim to continue Versace’s legacy celebrating and re-interpreting its bold and timeless aesthetic,” said Prada Chairman Patrizio Bertelli. He emphasized that Prada would offer Versace a solid platform supported by years of strategic investment and deep-rooted industry relationships. Bertelli, along with his wife and iconic designer Miuccia Prada, are the primary shareholders in Prada.
The agreed price represents a significant markdown from the $2.15 billion Capri Holdings, formerly known as Michael Kors, paid for Versace in 2018. At the time, Capri acquired the brand from the Versace family and private equity firm Blackstone.
Prada’s minimalist design ethos will now be complemented by Versace’s signature baroque style and bold prints, expanding the company’s reach to new customer segments.
“Versace has huge potential. The journey will be long and will require disciplined execution and patience,” said Prada CEO Andrea Guerra, signaling a strategic and measured approach to revitalizing the brand.
The acquisition unfolds during a climate of increased ambiguity within global markets. Numerous intended mergers, acquisitions, and initial public offerings have recently been postponed due to fluctuations in equity markets and apprehensions regarding recession, exacerbated by newly imposed U.S. tariffs.
Significantly, Prada has predominantly refrained from engaging in substantial acquisitions over recent decades following what Bertelli characterized as “strategic miscalculations” related to its late-1990s acquisitions of Helmut Lang and Jil Sander. This recent initiative marks a noteworthy re-engagement with deal-making, potentially redefining the contours of high-end fashion in Europe and beyond.