Italian fashion giant Prada has bought rival Versace from Capri Holdings for a cool 1.25 billion euros ($1.39 billion).
The deal, announced on Thursday, brings together two of Milan’s biggest fashion names, creating a luxury powerhouse with over 6 billion euros in annual revenue.
Prada’s move is a clear play to get even stronger in the high-stakes luxury market, where it’s up against giants like LVMH and Kering. This kind of merger is becoming more common as the luxury world deals with a bit of a slowdown, pushing brands to join forces to keep growing and stay on top.
Prada’s chairman, Patrizio Bertelli, called the acquisition a “pivotal moment,” saying, “We are delighted to welcome Versace to the Prada Group and to build a new chapter for a brand with which we share a strong commitment to creativity, craftsmanship, and heritage.”
The idea is that by combining their strengths, Prada and Versace will be better equipped to handle the challenges of today’s economy.
Versace’s journey to this point has been interesting. Back in 2018, Capri Holdings (which also owns Jimmy Choo and Michael Kors) bought Versace for 1.83 billion euros (which was around $2.1 billion at the time). Before that, the Versace family owned most of the company, with a smaller share held by a U.S. investment firm.
However, Versace’s sales haven’t been as strong lately, leading Capri to put the brand up for sale. Prada then entered exclusive talks in late February, which led to this deal.
The financial side of things shows how tricky the market is right now. Versace was initially expected to sell for around $1.6 billion, according to reports.
But economic problems, made worse by things like tariffs, forced Capri Holdings to accept a lower offer of 1.25 billion euros from Prada.
This price cut shows the uncertainty in the luxury fashion world, with things like trade policies and changing consumer tastes playing a role.
Adding another layer to the story, Donatella Versace stepped down as creative director last month after more than 30 years in the role. She took over in 1997 after the tragic murder of her brother, Gianni Versace, who founded the brand in 1978.
On April 1st, Dario Vitale took over. He’s known for his success in boosting sales at Miu Miu, Prada’s younger, trendier brand.
This leadership change is seen by many as a sign that the Prada-Versace deal was in the works, paving the way for a fresh creative direction.
What This Means for the Future of Fashion
Prada’s acquisition of Versace is a big move that could reshape the luxury fashion landscape. By joining their legacies and creative visions, the two brands aim to strengthen their positions against rivals like LVMH and Kering, while also tackling the challenges facing the industry.
This deal marks a new chapter for both Prada and Versace, promising a blend of tradition and ambition in the ever-changing world of high fashion.
