Prada on Thursday announced it was buying Versace for €1.25 billion ($1.38 billion) from Capri Holdings, a beleaguered New York group that at one point styled itself as the American answer to the great fashion groups of France.
The buyout — the biggest luxury deal of the year — is a sign of faith in the continued value of Made-in-Italy at a time when the financial markets are in chaos because of President Donald Trump’s whipsawing tariff policies. And it marks the end of Capri’s attempt to create an American luxury group to rival LVMH and Kering, while signaling an attempt by Prada to create an Italian competitor to the powerhouses.
“It’s a bold and ambitious move by Prada,” said Robert Burke, the eponymous founder of Robert Burke Associates.
“The acquisition would position Prada to diversify its portfolio and compete on
a larger global stage.”
Versace will join Prada and Miu Miu, as well as Luna Rossa, the America’s Cup sailing team, and the pastry brand Marchesi as part of the Prada group, creating a “best in class” mosaic of Italian savoir-faire. The group also includes the footwear brands Car Shoe and Church’s.
It also gives the Prada Group’s fashion holding critical mass, adding a ready-to-wear brand with a notably different identity to those of Miu Miu and Prada — as well as one that is not dependent on designer Miuccia Prada — to the mix.
In a news release, Andrea Guerra, Prada Group’s CEO, said the acquisition would add “a new dimension, different and complementary”, to the group. “Versace has huge potential,” he added, while noting, “the journey will be long”.
Prada plans to fund the acquisition with debt, borrowing more than €1 billion. The plan was approved by both companies’ boards and they expect the deal to close in the second half of the year, pending approval by regulators.
The Prada Group has been the rare success story during a general downturn in the luxury market, reporting 2024 revenues of €5.4 billion, a 17 per cent increase, driven in part by the tremendous recent success of Miu Miu, which experienced retail sales growth of 93 per cent last year.
By contrast, in its most recent financial report Capri, which also owns Michael Kors and Jimmy Choo, said it expected Versace revenues to drop to $810 million in its current fiscal year, from $1 billion in 2024. Versace has been seen as a potential acquisition target since an attempt by Tapestry, the group that includes Coach and Kate Spade, to acquire Capri was blocked last year by the Federal Trade Commission. Speculation that Prada would also buy Jimmy Choo, given its expertise in leather goods, was not borne out.
“The Versace business is in need of a complete turnaround,” said Luca Solca, a senior analyst with the research firm Bernstein. At the same time, he added, Prada’s track record with acquisitions “leaves much to be desired”.
Indeed, the Versace takeover is not Prada’s first try to extend its winning formula to other brands. In 1999, after a decade in which it helped define Italian fashion, Prada went on a buying spree, acquiring Jil Sander and Helmut Lang, two brands that seemed to share an intellectual approach to dressing with the group’s core brand. It turned out, however, that the alchemy Miuccia Prada and her husband, Patrizio Bertelli, created at Prada was not transferable. The group sold Lang in 2005 and it divested Sander the following year.
