Prada Buys Versace in $1.375 Billion Deal to Reinforce Italian Fashion Power
In a major shake-up for the luxury fashion world, Prada has struck a $1.375 billion deal to acquire Versace, including the brand’s existing debt. The acquisition comes as Prada continues to outperform amid a slowing global luxury market, while Versace has faced ongoing financial losses.
This landmark agreement not only marks a major move for the Milan-based Prada Group but also consolidates two of Italy’s most iconic fashion houses at a time when the industry is largely dominated by French giants like LVMH.
Passing the Torch
The deal was announced shortly after Donatella Versace’s exit as chief creative officer, bringing to a close an era that began following the 1997 murder of her brother and brand founder, Gianni Versace. Donatella, who helped steer the brand’s creative direction for over two decades, expressed confidence in the transition.
“Gianni and I have always had a huge admiration for Miuccia, Patrizio and their family,” she said. “I’m honored to have the brand in the hands of such a trusted Italian family business.”
Patrizio Bertelli, Prada’s chairman and husband of creative director Miuccia Prada, shared a similar sentiment:
“We aim to continue Versace’s legacy by reinterpreting its bold and timeless aesthetic,” he said. “At the same time, we’ll provide it with a stronger foundation, backed by years of investment and deep-rooted relationships.”
The Numbers Behind the Move
The price tag—$1.375 billion including debt—is significantly less than the $2.15 billion that Capri Holdings (then known as Michael Kors) paid to acquire Versace in 2018. Recent market volatility and new trade tariffs are believed to have driven the discount.
Capri CEO John Idol framed the deal as part of a broader strategy to refocus the company:
“This transaction reflects our commitment to increasing shareholder value and fueling growth for Michael Kors and Jimmy Choo.”
Capri Holdings’ stock dropped 3% following the announcement and has been down about 24% year-to-date.
Strategic Growth and a Return to M&A
For Prada, the acquisition signals a renewed interest in expansion. CEO Andrea Guerra believes that while turning around Versace won’t be instant, the brand has “huge potential.”
“The journey will be long and will require disciplined execution and patience,” Guerra said.
Prada plans to fund the deal through €1.5 billion in new debt, a significant move given the company’s cautious approach to mergers and acquisitions over the past two decades. The company had largely avoided big-ticket acquisitions since its late-1990s purchases of Helmut Lang and Jil Sander—moves Bertelli later referred to as “strategic mistakes.”
Unbiased Opinion: A Bold Bet on Italian Identity Amid Global Uncertainty
Prada’s acquisition of Versace is more than just a financial transaction—it’s a symbolic statement about the power of Italian fashion in an era often dominated by French luxury conglomerates. For Prada, the deal represents a chance to diversify its portfolio, leverage its infrastructure, and reenergize a legendary but struggling brand.
However, with global economic uncertainty, rising tariffs, and a volatile luxury market, this is no guaranteed win. The success of the deal will hinge on Prada’s ability to revitalize Versace without diluting its bold identity—a balancing act that requires vision, agility, and long-term investment.
Still, one thing is clear: Italian fashion just got a lot more united—and a lot more competitive.
