In a landmark deal, Prada has agreed to acquire fellow Italian fashion house Versace for $1.38 billion from Capri Holdings. The acquisition brings together two iconic brands and is poised to reshape the competitive landscape of the global luxury fashion industry.
Strategic Expansion Amid Industry Shifts
Prada’s decision comes as it seeks to expand amid a cooling luxury market. Despite the broader slowdown, Prada has managed to maintain robust demand for its minimalist designs. Meanwhile, Versace, known for its flamboyant baroque styles, has recently been grappling with quarterly losses.
“There are no overlaps in terms of creativity, in terms of customers,” said Lorenzo Bertelli, Prada’s marketing director and part of the family that controls the company. By acquiring Versace, Prada is looking to diversify its customer base while preserving brand distinctions.
A Bold Move to Counterbalance French Dominance
The deal strengthens Italy’s standing in a global luxury market largely dominated by French conglomerates like LVMH. Prada Chairman Patrizio Bertelli emphasized that Versace would benefit from a “strong platform” and ongoing investments. Bertelli and designer Miuccia Prada, both key shareholders, are spearheading this new direction.
Versace’s transition also follows the recent announcement that Donatella Versace is stepping down as chief creative officer. “Gianni and I have always had a huge admiration for Miuccia, Patrizio and their family,” Donatella said. “I am ready to support this new era for the brand in any way that I can.”
Deal Comes at a Discount Amid Market Turbulence
The price tag includes Versace’s debt and represents a steep discount compared to the $2.15 billion Capri Holdings paid for the brand in 2018. At the time, the purchase was seen as a bold move by the US-based company, then known as Michael Kors. However, with Capri’s shares down nearly 30% in 2025, the deal now appears to be more of a bargain for Prada.
“This transaction reflects our commitment to increase shareholder value, strengthen our balance sheet and power the future growth of Michael Kors and Jimmy Choo,” said Capri CEO John Idol.
Prada has taken on 1.5 billion euros in new debt to finance the acquisition, with plans to finalize the deal in the second half of the year. The timing is notable, coming as other potential acquisitions and IPOs have stalled due to recent market instability and recession fears sparked by new US tariffs.
A New Chapter for Prada’s Growth Strategy
This acquisition represents a significant pivot for Prada. Since its less-successful ventures in the 1990s—such as the purchases of Helmut Lang and Jil Sander—the company has largely avoided major M&A activity. However, the Versace deal suggests a new, bolder approach under CEO Andrea Guerra, who took over from the Bertellis two years ago.
The deal also highlights the rising influence of Lorenzo Bertelli, widely expected to take over as CEO in the future. With the Versace brand now under its wing, Prada appears to be setting the stage for a new chapter in Italian fashion leadership.
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