Prada Acquires Versace in $1.4 Billion Deal, Redrawing the Map of Italian Luxury Fashion

In a major shake-up in the luxury fashion world, Prada has announced a $1.38 billion deal to acquire rival Italian label Versace from Capri Holdings. The acquisition marks a significant turning point for both brands and cements Italy’s growing strength in an industry long dominated by French conglomerates such as LVMH. The deal, which includes Versace’s debt, comes as Prada looks to broaden its appeal and unlock new growth, while Versace seeks financial stability after posting losses in recent quarters. The transaction is expected to close in the second half of 2025.

Minimalism Meets Maximalism

Prada and Versace may both hail from Milan, but their aesthetics couldn’t be more different. Prada is known for its sleek, minimalist sophistication, while Versace dazzles with bold prints and flamboyant glamour. According to Lorenzo Bertelli, Prada’s marketing director and heir apparent to the fashion empire, the brands are complementary, not competitive: “There are no overlaps in terms of creativity, in terms of customers.”

This creative diversity is exactly what Prada hopes to harness. “We will provide Versace with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships,” said Prada Chairman Patrizio Bertelli.

Facing Global Risks for Long-Term Gain

The deal comes despite global economic uncertainty and looming U.S. Trump tariffs on European goods. Both companies were willing to “swallow a bunch of geopolitical risks” to finalize the transaction, according to insiders. Capri Holdings, which owns Michael Kors and Jimmy Choo, needed to offload Versace to refocus on turning around its core American brands.

Though the luxury market has cooled in recent months, Prada appears undeterred. The company views the acquisition not as a cost-saving strategy but as a long-term investment in revenue growth. “This is a growth story,” said Prada CEO Andrea Guerra during an analyst call.

A New Era for Versace

The acquisition comes shortly after Donatella Versace stepped down as chief creative officer of the brand founded by her brother, Gianni Versace, in 1978. “Gianni and I have always had a huge admiration for Miuccia, Patrizio and their family,” she said in a statement. “I am ready to support this new era for the brand in any way that I can.”

For Prada, this marks a rare return to big-ticket acquisitions after a 25-year hiatus. Past purchases of Helmut Lang and Jil Sander in the 1990s were considered strategic missteps. But this deal, led by the next generation of the Bertelli family, particularly Lorenzo Bertelli, signals a bold new direction.

Market Reaction and Outlook

Capri’s shares fell 9% following the announcement, extending a downward trend. Analysts noted the sale price was significantly lower than the $2.15 billion Capri paid for Versace in 2018. Still, both companies see the deal as a strategic pivot.

With Prada’s disciplined execution and global platform, the union with Versace may not only reshape their futures but also redefine the global fashion landscape — on Italian terms.