1 day Ago By Qatar Tribune
Qatar tribune Agencies Prada is acquiring crosstown Milan fashion rival Versace from the U.S. luxury group Capri Holdings for about 1.
25 billion euros ($1.4 billion), in a move that unites two of the biggest names in Italian fashion and offers the prospect of enhanced revenues. Prada is seeking to expand, having defied a slowdown in luxury demand, while Versace has been operating at a loss in recent quarters.
The deal, announced on Thursday, will put Versace, known for silhouettes and bold Greco and Medusa motifs, under the same roof as Prada’s “ugly chic” aesthetic and the youth-driven Miu Miu whose stunning growth in recent years has far outpaced the market. Prada said the 47-year-old Versace brand offered “significant untapped growth potential.” “This is exactly the strength for our group.
There are no overlaps in terms of creativity, in terms of customer,” said Lorenzo Bertelli, chief marketing officer and a member of the family that controls Prada. Bertelli is being groomed to one day take over the business that his parents – Miuccia Prada, the group’s creative force and largest shareholder, and Patrizio Bertelli, its chairperson and executive director – have turned into a global fashion juggernaut. “We are buying a brand with huge potential, with a very recognizable aesthetic,” Bertelli said, underlining that the Versace brand name recognition, putting it among the top 10 in the world, far outweighs its business performance.
The merger strengthens Italy’s hand in a luxury industry led by French conglomerates, the biggest being Louis Vuitton owner LVMH. “We will provide (Versace) with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships,” Patrizio Bertelli said in a statement. Prada and Capri braved the uncertainty over U.
S. tariffs and market volatility to sign the deal, according to people familiar with the matter. Capri needed to divest Versace to focus on turning around its Michael Kors fashion brand, one of the sources said.
For Prada, the bet on Versace comes at a time when it is looking to revive growth as its existing stable of brands start to mature, the source added. Both Prada and Versace, which have global supply chains and boast of a widespread customer base, were willing to “swallow a bunch of geopolitical risk” to get the deal done, the source said. The acquisition is a long-term project for Prada and is aimed mainly at expanding revenues rather than cost-savings, Prada CEO Andrea Guerra told analysts in a conference call.
It follows the announcement on March 13 that Donatella Versace was stepping down as the chief creative officer of the brand founded by her late brother Gianni in 1978. “Gianni and I have always had a huge admiration for Miuccia, Patrizio and their family,” Donatella said. “I am ready to support this new era for the brand in any way that I can.
” There are no plans to change the CEO and Miuccia will not be involved in the creative side of Versace, the executives said. Guerra added that the recent creative shakeup at Versace, with Miu Miu head of design Dario Vitale replacing Donatella as creative director effective April 1, had nothing to do with the deal. He called it “an independent, very personal” decision by Vitale.
Lorenzo Bertelli said the experience of Miu Miu’s growth had shown that small changes can make all the difference. “We don’t need to change the brand, revolutionize it. We need to just evolve it, make the right things happen, and all together they are hopefully going to bring a huge spark and bring back Versace to be a huge success,’’ he said.
Capri Holdings’ shares tumbled 9% in New York and are down nearly 30% since the start of 2025, with analysts noting the deal valuation was lower than expected. The price Prada has agreed to pay for Versace, which includes debt, is a big discount to the roughly $2.15 billion including debt that Capri, then known as Michael Kors, paid for Versace in 2018 when it was sold by the Versace family and Blackstone.
Versace represented 20% of Capri Holdings 2024 revenue of 5.2 billion euros. An analyst presentation for the Prada deal said that Versace would represent 13% of the Prada Group’s pro-forma revenues, with Miu Miu coming in at 22% and Prada at 64%.
The Prada Group, which also includes Church’s footwear, reported a 17% boost in revenues to 5.4 billion euros last year. Guerra said the deal was aimed at building a “sustainable revenue growth” and boosting the brand’s identity, and was not about squeezing synergies.
Prada’s statement underlined that Versace will “maintain its creative DNA and cultural authenticity,” while benefitting from its “industrial capabilities, retail execution and operations expertise.” Prada started to explore a deal for Versace last year when Capri’s sale to Tapestry, whose brands include Coach and Kate Spade, was scrapped after being challenged by antitrust regulators, a second source said. The purchase price of $1.
4 billion for Versace barely changed since negotiations progressed seriously in January, the sources added. “This transaction reflects our commitment to increase shareholder value, strengthen our balance sheet and power the future growth of Michael Kors and Jimmy Choo,” said Capri CEO John Idol. Prada said it had committed to 1.
5 billion euros of new debt to fund the deal, which is expected to close in the second half of the year. The deal comes at a time when several acquisitions and initial public offerings (IPOs) have been scuttled in the wake of a global equity sell-off and fears of recession triggered by U.S.
President Donald Trump’s new tariffs this month. Since Prada’s acquisitions at the end of the 1990s of Helmut Lang and Jil Sander, which leading Prada shareholder Bertelli called “strategic mistakes,” the group has largely steered clear of major dealmaking. The Versace acquisition marks a major shift in the group’s strategy and comes two years after the appointment of Guerra at the helm, a role previously held by Patrizio Bertelli and Miuccia Prada.
It also reflects the growing influence of Lorenzo Bertelli, their son, who is expected to become CEO in the future. Prada traces its roots back to a leather goods shop founded in Milan by Miuccia Prada’s grandfather in 1913. The Versace label, known for its Medusa head logo, was founded by Gianni Versace in Milan.
Donatella became its creative force following the killing of Gianni in Miami in 1997. Copy 13/04/2025 10.
