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businessoffashion.comPrada Group to Acquire Versace for €1.25 Billion
Prada plans to invest an additional €250 million in relaunching Versace, which has struggled to keep up with bigger heritage brands since selling to Michael Kors parent Capri Holdings in 2018.
Versace Autumn/Winter 2025. (Versace)
By ROBERT WILLIAMS
10 April 2025
Prada Group has agreed to acquire Versacefrom Capri Holdings for €1.25 billion ($1.38 billion), the companies said in a statement Thursday.
Prada is borrowing an additional €250 million to invest in relaunching Versace, which turned loss-making last year as it struggles to keep up with bigger, heritage brands amid a global downturn in luxury sales.
The deal is going ahead despite a global market rout sparked by Trump’s trade war, which risks hammering demand for high-end products in addition to clouding the outlook for fashion’s global supply chain. Shares in Michael Korsand Versace parent Capri tumbled 36 percent in a week, before partially recovering Wednesday after Trump announced a 90-day pause on the heftiest tariffs on imports from all countries except China.
In spite of a volatile market that is likely to pinch both strong brands like Prada and struggling rivals like Versace, Prada Group appears to have decided it couldn’t pass up the chance to add one of Italy’s most famous brands to its stable.
Turning around Versace will be a challenge for the group controlled by Miuccia Prada and her husband Patrizio Bertelli, but could provide a new avenue for growth beyond its flagship Prada brand and Miu Miu sister label, as well as helping to fend off consolidation by French groups LVMH and Kering.
Versace’s estimated revenues fell 19 percent to $810 million in the fiscal year through March, Capri said. That’s roughly in line with the size of the business when the American group acquired it for $2.1 billion in 2018. The brand is hoping to break even by March 2026 after operating margins swung to a high-single-digit loss over the past year.
Last month, Versace named a new artistic director hired from Prada’s Miu Miu label, Dario Vitale, to help revamp its collections. Vitale is a seasoned operator, whose fresh creative vision could revive interest in a brand that’s been designed by co-founder Donatella Versace since 1997.
On the other hand, industry sources say the designer’s exit from Prada Group was fraught. And his appointment could raise concerns among executives that his Versace could cannibalise sales of fast-growing Miu Miu.
The deal will test recent efforts to financialise and professionalise Prada’s governance and operations. Over the past five years, the Milan-based firm has sought to accelerate its succession plans, bringing in a new CEO, CFO and deputy chairman as founders Prada and Bertelli relinquished their co-CEO titles. Star designer Raf Simons joined the company as co-creative director of the Prada brand in 2020.
Prada Group’s sales have continued to grow despite a downturn in the overall luxury market. Revenues rose 15 percent to €5.4 billion ($5.7 billion) last year. Expansion was driven principally by Miu Miu, whose retail sales nearly doubled.
At Capri, investors welcomed recent months’ reports that the group aimed to shed its Versace and Jimmy Choo businesses in order to focus on turning around Michael Kors, after a plan to sell the group to Coach-owner Tapestry fell through last year. US anti-trust authorities blocked the previous deal saying it would hurt consumers by making the country’s handbag market insufficiently competitive.
Prada negotiated further discounts to Versace’s price amid the current market rout. At €1.25 ($1.375 billion), Capri is selling Versace for far less than the $2.1 billion it paid for the brand in 2018. But the opportunity to reduce its net debt of $1.12 billion, as well as getting a loss-making unit off its balance sheet, likely enticed the board to accept a deal. In February, Fitch downgraded its rating for Capri’s debt to BBB-, just a notch above what would be considered junk bonds.
