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The Prada group has completed a US$1.375 billion (C$1.93 billion) deal to buy Milan-based fashion rival Versace, bringing the fashion house known for its sexy silhouettes under the same roof as Prada's “ugly chic” aesthetic and Miu Miu's youthful appeal.
The long-awaited deal is expected to revive Versace's fortunes after middling post-pandemic performance under US luxury brand group Capri Holdings.
Prada said in a one-line statement that the acquisition was completed after receiving all regulatory approvals. Capri Holdings, which owns Michael Kors and Jimmy Choo, said the money would be used to pay down debt.
Donatella Versace welcomed the deal in an Instagram post that also celebrated the birthday of the brand's late founder, her brother Gianni Versace.
“Today is your day and the day Versace joins the Prada family. I think about the smile that would be on your face,” she wrote in the post, which also included a photo of Gianni Versace with Miuccia Prada in 1996.
The future of Versace
Prada heir Lorenzo Bertelli will lead Versace's next phase as executive chairman, as well as group marketing director and head of sustainability.
The son of creative director Miuccia Prada and longtime Prada Group chairman Patrizio Bertelli said he doesn't expect any quick leadership changes at Versace, although he also noted that the company, which is one of the 10 most recognizable brands in the world, has long lagged in the market.
Prada stressed that the 47-year-old Versace brand offers “significant untapped growth potential.”
The appeal of the deal is that it incorporates Prada's “minimalist style.” [with] maximalist Versace,” said Luca Solca, managing director of the luxury sector at research firm Sanford C. Bernstein, meaning brands don’t compete for the same customers.
According to Salk, Versace was “long past its prime.” “The challenge and the opportunity is to make it relevant again… They will have to invent something that makes the brand attractive, desirable and interesting again.”
Versace has already begun a creative relaunch under new designer Dario Vitale, who presented his first collection at Milan Fashion Week in September. He was previously head of design at Miu Miu, but his move to Versace was unrelated to the Prada deal, executives said.
The runway show received mixed reviews, but the collection itself—a colorful, candid riff on 1980s style—received good reviews from shoppers. “I think this seems like a promising first step,” Solca said.
The 13-year-old Cross Lake First Nation girl knew she would one day have to walk international runaways. Modeling work in Winnipeg and Toronto has led to New York, and Teryn Monias will soon be heading to Paris Fashion Week 2025.
Breaking away from the past
Capri Holdings paid US$2 billion for Versace in 2018 but has struggled to position the brand's bold profile in the recent era of “quiet luxury”.
Capri Holdings Chairman John D. Idol said in a statement that “Prada is the ideal partner to help guide this iconic luxury house into its next era of growth.”
Versace accounted for 20 percent of Capri Holdings' 2024 revenue of €5.2 billion ($8.4 billion Canadian).
When the deal was announced in April, Prada said Versace would represent 13 percent of Prada Group's pro forma revenue, with Miu Miu owning 22 percent and Prada 64 percent. The Prada group, which also includes Church shoes, reported revenue growth of 17 percent to 5.4 billion euros ($8.8 billion Canadian) last year.
The Prada group has already begun preparations to incorporate its rival Versace into its Italian production system, a point of pride for the group.
“When making bags for a brand, the know-how is the same,” Bertelli told reporters last week at the leather goods factory of the Scandicci group, which already produces bags for the Prada and Miu Miu brands and will soon add Versace.
