• Prada has finalized a deal to acquire Versace for approximately $1.38 billion, including debt.
• This acquisition strengthens Prada’s position in the global luxury market, particularly against French rivals LVMH and Kering.
• Versace, previously owned by Capri Holdings, faced declining sales and operational challenges, making the acquisition a way to revitalize the brand.
• The transaction follows the departure of long-time Versace creative director Donatella Versace, who now takes on a brand ambassador role.
• Prada aims to maintain Versace’s aesthetic while leveraging operational efficiencies to boost growth.

Prada SpA has confirmed it will acquire Versace from Capri Holdings for a deal valued at $1.38 billion, which includes the brand’s debts. This significant acquisition is set to unite two of Italy's most iconic fashion labels and help create a formidable competitor against French luxury giants like LVMH and Kering. Prada’s Chairman, Patrizio Bertelli, emphasized that the company aims to preserve Versace's "bold and timeless aesthetic," while enhancing its industry capabilities through this merger. Despite Versace’s historical prestige, the brand has struggled financially in recent years, recently reporting a decline in sales. Capri Holdings, which purchased Versace for €1.83 billion in 2018, had put the brand on the market as a strategic move to stabilize its own finances. The decision came in the wake of market fluctuations exacerbated by tariffs imposed by former U.S. President Donald Trump, which have led to heightened costs in the fashion industry. The deal was initially expected to be approximately $1.6 billion; however, ongoing negotiations between Prada and Capri Holdings led to a reduced price. BBC reported that Capri has faced significant challenges with Versace’s market performance, and the luxury sector has endured a slowdown, prompting the need for a strategic sale. The acquisition also marks the end of Donatella Versace’s tenure as creative director, a position she held since 1997 until her recent announcement of stepping down. She will continue to play a role within the brand as chief brand ambassador. Forbes highlights that under the new leadership of Dario Vitale, who previously worked with Prada's Miu Miu, Versace is expected to pivot towards a fresher audience. Prada’s acquisition represents not only a financial investment but a commitment to revitalizing a storied brand in the Italian fashion landscape. The merger is anticipated to provide Versace with both the creative direction it needs and the substantial retail infrastructure of the Prada Group to reclaim its former glory in the competitive luxury arena. Channel News Asia noted the potential for this collaboration to create a dynamic balance between Versace's flamboyant style and Prada's more minimalistic approach, despite some industry analysts flagging potential risks in merging such distinct brand identities.