Italian luxury brand Prada has decided to buy its smaller competitor Versace from Capri Holdings in a major business deal. The total value of this deal is $1.375 billion, as announced by Prada on Thursday.
This decision comes at a time when Prada is performing well, even though the overall demand for luxury products is slowing down around the world. On the other hand, Versace has been facing financial difficulties and has not been making profits.
By joining forces, these two famous Italian fashion brands aim to grow stronger together. This deal is also seen as a way to give Italy a more powerful role in the global luxury fashion market, which is currently led by big French companies like LVMH and Kering.
Prada Acquires Versace for $1.4 Billion
On Thursday, Italian luxury fashion brand Prada confirmed that it has agreed to buy Versace from U.S.-based Capri Holdings in a cash deal worth around $1.4 billion.
Patrizio Bertelli, Chairman and Executive Director of Prada Group, shared his excitement about the acquisition, 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.”
Capri Holdings, which also owns fashion brands like Michael Kors and Jimmy Choo, had originally bought Versace in 2018 for approximately €1.83 billion (about $2.1 billion at the time). Back then, the Versace family held 80% of the brand, while global investment firm BlackRock owned the remaining 20%, according to AFP.
However, over the years, fashion trends began to shift. The bold, flashy style that Versace is known for lost popularity as more consumers leaned toward “quiet luxury” – simpler, more subtle fashion. As a result, Versace faced falling sales and struggled to keep up with market demands.
Looking to restructure, Capri Holdings decided to sell Versace after its performance started declining. In late February, Capri entered exclusive talks with Prada, which have now resulted in the finalized deal.
The company also had to settle for a lower sale price than what it originally paid due to economic challenges, including tariffs and trade tensions that occurred during former U.S. President Donald Trump’s time in office. These external factors added financial pressure and made it difficult for Capri to get a higher return on its earlier investment.
With this acquisition, Prada not only expands its luxury brand portfolio but also takes a bold step to strengthen Italy’s position in the global fashion market.
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Prada to Finalize Versace Acquisition by Late 2025
Prada, the iconic Milan-based luxury brand led by Miuccia Prada and her husband Patrizio Bertelli, has confirmed that its $1.375 billion acquisition of Versace will be completed in the second half of this year. The deal, first reported by Bloomberg on March 2, brings Versace back under Italian ownership after being bought by Capri Holdings in 2018 for $1.8 billion.
This is the largest acquisition in Prada’s 112-year history and is seen as a strategic move to strengthen its global presence in the high-end fashion market. By adding Versace to its portfolio, Prada aims to better compete with luxury giants like LVMH and Kering. The deal also gives Versace a fresh opportunity for revival after struggling under Capri’s leadership.
The acquisition went ahead despite ongoing global market instability and lingering tariff tensions from the Trump era. Prada had been in extended talks to secure the deal with Versace, a brand famous for its bold, trend-setting designs launched by founder Gianni Versace in the 1970s.
In a key development ahead of the deal, Donatella Versace stepped down as creative director last month, ending a 30-year era. She took over in 1997 after the tragic murder of her brother Gianni, who started the fashion house in 1978. Donatella, who turns 70 in May, now serves as Versace’s global brand ambassador.
Dario Vitale, known for driving growth at Prada’s younger label Miu Miu, took over as creative director on April 1, ushering in a new era for the iconic fashion house.
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FAQs
Q.1. Why is Prada acquiring Versace?
Ans. Prada is acquiring Versace to expand its global luxury presence and strengthen its position against French rivals like LVMH and Kering.
Q.2. How much is the Prada-Versace deal worth?
Ans. The acquisition deal is valued at approximately $1.375 billion, making it the largest in Prada’s 112-year history.
Q.3. When will the Prada-Versace deal be finalized?
Ans. The deal is expected to close in the second half of 2025.
Q.4. Why did Capri Holdings sell Versace?
Ans. Capri Holdings decided to sell Versace due to declining performance, market challenges, and a shift in fashion trends.
Q.5. Who is the new creative director of Versace?
Ans. Dario Vitale, formerly with Miu Miu, became Versace’s creative director on April 1, succeeding Donatella Versace.
