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Italian fashion house Prada announced Thursday it has reached a deal with US group Capri Holdings to acquire its rival Versace for 1.25 billion euros ($1.38 billion). The acquisition is expected to create a luxury group with revenues exceeding six billion euros, positioning it to better compete with industry giants like LVMH and Kering amid a global slowdown in the sector.
"We are delighted to welcome Versace to the Prada Group and to build a new chapter for a brand with which we share a strong commitment to creativity, craftmanship and heritage," Prada group chairman and executive director Patrizio Bertelli said in a statement.
In 2018, Capri paid 1.83 billion euros (then $2.1 billion) to acquire Versace, which was previously owned 80 percent by the Versace family and 20 percent by the US investment fund BlackRock. Amid declining sales at the Milan-based label, it put Versace up for sale, and began exclusive negotiations with Prada at the end of February.
Capri, which also owns Jimmy Choo and Michael Kors, had to accept a reduced price from Prada amid the market turmoil caused by US President Donald Trump's tariffs.
The Financial Times reported that the price was initially expected to be about $1.6 billion but had been negotiated downwards in recent days.
While still a label associated with the jet set, some of Versace's luster has waned in recent years.
It posted $193 million in revenue in its fiscal 2025 third quarter, down 15 percent. By contrast, Prada, under the creative helm of Miuccia Prada, the 76-year-old granddaughter of group founder Mario, is in robust health. Despite the global slowdown in sales of luxury goods, Prada's net profit jumped 25 percent to 839 million euros in 2024, with revenues up 15 percent to 5.4 billion euros.
Andrea Guerra, Prada's group chief executive officer, said on Thursday that Versace had "huge potential" but warned there was work to do. "The journey will be long and will require disciplined execution and patience. The evolution of a brand always needs time and constant focus," he said.
The deal, funded through 1.5 billion euros of new debt, is expected to close in the second half of 2025.
The two fashion labels have starkly different styles, with Versace's exuberance contrasting with Prada's sophisticated minimalism.
Prada said its new acquisition "constitutes a strongly complementary addition" to its portfolio.
