Prada's €1.25bn Versace takeover: a new era for Italian luxury
It comes after months of speculation about a potential deal to combine the two Italian fashion houses and, more recently, rumours that the acquisition was set to collapse after market upheaval in response to President Trump's tariff policies.
Insiders say the original deal was expected to be agreed at $1.6bn, but a discount of about $200m was achieved because market turmoil has hit the retail industry particularly hard.
Capri, which also owns Michael Kors and Jimmy Choo, originally bought Versace for $2.1bn in 2018. After an $8.5bn attempt by Tapestry – the American group that owns Coach and Kate Spade – to acquire Capri was blocked last year by the US Federal Trade Commission, Capri has been under pressure to sell off Versace to reduce its debt. According to those close to the deal, Prada was one of the earliest bidders.
In a statement confirming the news, Prada's group chair and executive director Patrizio Bertelli said the group was 'ready and well positioned to write a new page in Versace's history'. Bertelli added that both companies 'share a strong commitment to creativity, craftsmanship and heritage'.
While Capri failed to create an American luxury group to rival fashion companies such as LVMH and Kering, the acquisition hints at an attempt by Prada to strengthen its position as an Italian powerhouse. Versace will join the fashion brands Prada and Miu Miu, the footwear brands Church's, Car Shoe and Luna Rossa, the America's Cup sailing team Luna Rossa and the pastry brand Marchesi.
It is not the first endeavour by Prada to add to its portfolio. In 1999, it acquired Jil Sander and Helmut Lang and, in 2000, it added Alaia to its lineup. However, by 2007, after a series of disputes and financial challenges, it had parted ways with all three brands. Now, the Versace acquisition offers them another opportunity to intensify the global reach of the Made in Italy group.
While the luxury fashion market has been facing a significant slowdown, the Prada Group has enjoyed rare success. It reported revenues of €5.4bn in 2024, 17% higher than the previous year. This increase was partly driven by Miu Miu – the brand behind those viral micro-miniskirts and satin ballet shoes – which has almost doubled its profits this year, hitting close to £1bn in sales.
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Last month, it was announced that Dario Vitale, a former image director at Miu Miu, would be succeeding Donatella Versace as creative director, a position Versace had held for 27 years. Instead, Versace will take up the role of chief brand ambassador, overseeing the house's red-carpet dressing and philanthropic work.
Prada and Versace are often pitted against each other as Italian fashion rivals, but their designs are diametrically opposed. Versace champions the traditional tropes of femininity with unabashed enthusiasm – see high hemlines, high heels, big hair. Miuccia Prada, who holds a doctorate in political science and, prior to joining the family business in 1970 was a Communist, is often referred to as 'fashion's intellectual'. She has previously described her work as ugly clothes in hideous fabrics. However, the two women have a perhaps unlikely friendship. Speaking to The Telegraph in 2012, Versace said: 'We just talk, talk, talk. She's so inspiring. We make fun of each other and teach each other. She says, 'I could never make sexy clothes, but I love them.' And I say, 'Well, I love what you do'.'
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