Prada Group Acquires Versace for €1.25 Billion, Expanding Luxury Fashion Portfolio

The Prada Group has announced a significant acquisition, revealing its plans to purchase the iconic Italian fashion house Versace from the U.S. luxury group Capri Holdings for an estimated 1.25 billion euros ($1.4 billion). This strategic move, which aims to enhance Prada's portfolio, has been met with enthusiasm within the fashion industry.

Strengthening Prada's Portfolio

Prada has expressed confidence that the integration of Versace's "highly recognizable aesthetic" will serve as a complementary addition to its existing brands, Prada and Miu Miu. The company emphasized that the acquisition aligns with its vision of expanding its influence in the luxury market.

Financial Details of the Deal

The final valuation of the deal is subject to adjustment at the time of closing, which is anticipated to occur in the second half of the year. To facilitate this acquisition, Prada plans to secure 1.5 billion euros in new debt. Notably, the transaction has received approval from the boards of directors of both Prada and Capri Holdings.

Preserving Versace's Identity

In a statement, Prada assured that Versace will retain its "creative DNA and cultural authenticity," while benefiting from the Prada Group's robust consolidated platform. This includes access to enhanced industrial capabilities, improved retail execution, and operational expertise, ensuring that Versace continues to thrive in its unique identity.

Versace's Ownership and Transition

Versace, founded in 1978 by the late Gianni Versace, has been under the ownership of Capri Holdings since 2018. Capri Holdings, which also encompasses Michael Kors and Jimmy Choo, acquired Versace for $2 billion. However, Capri Holdings faced challenges in positioning Versace within the evolving landscape of luxury fashion, characterized by a shift towards more understated aesthetics.

Leadership Changes and Strategic Moves

In a recent organizational shakeup, Capri Holdings appointed Dario Vitale as the new creative director of Versace, succeeding Donatella Versace. This transition was interpreted as a strategic maneuver in anticipation of the sale to Prada. Miuccia Prada acknowledged the group's interest in acquiring Versace during Milan Fashion Week, signaling the impending shift in ownership.

This acquisition marks a significant development in the luxury fashion landscape, as Prada seeks to broaden its influence by incorporating Versace's renowned brand into its portfolio. The move is expected to create new opportunities for both Prada and Versace, while also reshaping the dynamics of the luxury fashion market.