Prada has agreed to buy its smaller fashion house rival, Versace, in a billion-dollar deal that unites two of the biggest designer fashion brands.
The deal to unite the two Italian fashion houses has an estimated value of $1.375 billion, the Prada Group said on Thursday (April 10).
Prada is seeking to expand, having defied a slowdown in luxury demand, while Versace has been grappling with losses in recent quarters.
The merger bolsters Italy’s position in a luxury market long dominated by French giants, chief among them LVMH, the parent company of Louis Vuitton.
“This is exactly the strength for our group. There are no overlaps in terms of creativity, in terms of customer, Lorenzo Bertelli, Prada’s chief marketing officer, said in a statement.
“We are buying a brand with huge potential, with a very recognizable aesthetic,” he added, noting that Versace’s global name recognition—ranking among the top 10 worldwide—far outweighs its current business performance.
The final value of the deal will be adjusted at closing, which, according to Reuters, is expected in the second half of the year. It will be funded by €1.5 billion ($1.71 bn) in new debt and has been approved by the Prada Group and Capri Holdings board of directors.
“We aim to continue Versace’s legacy celebrating and re-interpreting its bold and timeless aesthetic,” Prada’s Chairman Patrizio Bertelli stated.
“At the same time, we will provide it with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships,” added Bertelli, husband of Prada designer Miuccia Prada.
Capri Holdings, which owns Michael Kors and Jimmy Choo, paid $2 billion for Versace in 2018 but had been struggling to position Versace’s bold, baroque-style prints in the recent era of “quiet luxury.
Versace represented 20% of Capri Holdings’ 2024 revenue of 5.2 billion euros.
An analyst presentation for the Prada deal said that Versace would represent 13% of the Prada Group’s pro-forma revenues, with Miu Miu coming in at 22% and Prada at 64%.
The Prada Group, which includes Church’s footwear, reported a 17% revenue boost to 5.4 billion euros last year.
Donatella Versace, who stepped down from her creative director role at Versace after nearly 30 years, praised the new partnership. She had held the position since 1997, taking over after the murder of her brother, Gianni.
“Gianni and I have always had a huge admiration for Miuccia, Patrizio and their family,” she said
“I am honored to have the brand in the hands of such a trusted Italian family business and I am ready to support this new era for the brand in any way that I can,” she added.
The 69-year-old has a new role as the chief brand ambassador for Versace, while Dario Vitale, who is a former design and image director of Miu Miu, took over as chief creative officer.
