Two of the biggest names in fashion will soon be under one roof.
In a potentially industry-changing move, Prada has agreed to acquire Versace from Capri Holdings for $1.375 billion. This acquisition brings the iconic Versace brand back under Italian ownership and positions Prada to challenge French luxury conglomerates like LVMH and Kering.
The deal comes amid a period of strong performance for Prada, while Versace has faced financial struggles. Versace reported a 15% decline in revenues in the third quarter ending December 28, with operating losses increasing to $21 million, according to Reuters.
In March, Donatella Versace stepped down as chief creative officer, closing a significant chapter for the brand. Dario Vitale, formerly of Prada’s Miu Miu label, is set to take over the role in her place, embarking on a new direction for Versace’s design leadership.
Prada’s acquisition is part of a broader strategy to expand its brand portfolio and strengthen its position in the global luxury market. CEO Andrea Guerra emphasized the company’s commitment to honoring Versace’s iconic aesthetic, stating, “We feel ready to open this new chapter. Versace has huge potential. The journey will be long and will require disciplined execution and patience. The evolution of a brand always needs time and constant focus.”
This move also mirrors a broader shift in the luxury industry, with Italian brands seeking to consolidate and compete more effectively against foreign-owned conglomerates. Despite Italy producing over half of the world’s luxury goods, it has struggled against the scale of its French competitors—a narrative that could change with the acquisition.
While the merger presents opportunities, it also comes with challenges. Analysts suggest that substantial investments in design and marketing will be needed to revive Versace. Additionally, Prada may need to overhaul Versace’s wholesale and outlet store strategies, which currently account for a significant portion of its sales. However, if done correctly, this acquisition will be Prada’s next step toward becoming a leading Italian luxury conglomerate.
