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Prada finalizes Versace takeover in $1.38bn deal
Italian fashion giant Prada has officially acquired Versace, merging two iconic luxury brands under a single corporate umbrella. The transaction, valued at $1.38 billion (£1.04 billion), was confirmed in a brief statement on Tuesday after securing all necessary regulatory approvals.
Deal marks significant loss for former owner
The purchase price represents a steep decline from the $2 billion Capri Holdings paid for Versace in 2018. The sale results in a roughly $700 million loss for Capri, which also owns Michael Kors and Jimmy Choo. Company executives stated the proceeds would be used primarily to reduce corporate debt.
"We plan to use the proceeds to repay the majority of our debt, which will substantially strengthen our balance sheet,"
John D. Idol, CEO of Capri Holdings
Leadership changes precede acquisition
Donatella Versace, who led the brand's creative vision for 27 years, stepped down as creative director in March. Her departure followed a period of strategic shifts under Capri's ownership, including a move toward minimalist designs and price increases. She was succeeded by Dario Vitale, formerly a design director at Miu Miu, Prada's youth-oriented luxury label.
Versace had assumed leadership in 1997 after the murder of her brother, Gianni Versace, the brand's founder.
Prada eyes expansion amid competitive luxury market
The acquisition positions Prada to better compete with industry leader LVMH, the French conglomerate behind Louis Vuitton, Dior, and Fendi. Prada's portfolio now includes its namesake brand, Miu Miu, and Versace, with executives expressing confidence in the latter's growth potential.
"The journey will be long and will require disciplined execution and patience,"
Andrea Guerra, CEO of Prada
Challenges ahead for Versace's revival
Analysts note that Versace's sales have slowed in recent years, prompting Capri to divest the brand. The company's shift away from its signature ornate designs toward minimalism may have contributed to its struggles, despite efforts to elevate its market positioning through higher pricing.
