The Prada Group has announced its acquisition of the renowned Italian fashion brand Versace from Capri Holdings, valuing the deal at approximately $2.2 billion. This strategic move combines Versace’s provocative design elements with Prada’s distinctive “ugly chic” style and the burgeoning Miu Miu brand, which has significantly outshone market growth in recent years. Prada executives anticipate considerable untapped growth potential from the 47-year-old Versace brand.
Lorenzo Bertelli, Prada’s Chief Marketing Officer, highlighted that both brands have distinct creative directions and customer bases, which enhances the group’s strengths. Bertelli, who is being prepared for a future leadership role, reiterated that Versace’s aesthetics and market recognition vastly surpass its current business performance. He views the acquisition as an opportunity to evolve Versace without radical changes.
The deal is set to close in the latter part of the year, pending adjustments to the final value. Funding will comprise €1.5 billion in new debt, with approvals secured from both Prada and Capri Holdings boards. Prada CEO Andrea Guerra emphasised that the acquisition aims to foster sustainable revenue growth and elevate the brand identity rather than focusing on operational synergies.
Importantly, Versace is expected to retain its creative essence and cultural authenticity, while benefiting from Prada’s operational expertise. There are no immediate plans to alter Versace’s leadership structure. Changes in creative leadership at Versace, including the departure of Donatella Versace and the appointment of Dario Vitale from Miu Miu as the new creative director effective April 1, were described as independent decisions rather than connected to the acquisition.
Bertelli also expressed confidence that similar successful adjustments made at Miu Miu could reinvigorate Versace. The acquisition follows Capri Holdings’ earlier struggles to place Versace within a trend towards more understated luxury, despite having purchased the brand for $3.2 billion in 2018. Presently, Versace contributes to 20% of Capri’s revenues, but projections indicate it could encompass 13% of the Prada Group’s revenues post-acquisition.
Donatella Versace, who stepped into a new role as chief brand ambassador, expressed enthusiasm about joining the Prada family, appreciating the brand’s future under a respected Italian family business. The Italian government endorsed the acquisition as a significant step in securing Versace’s legacy, with Industry Minister Adolfo Urso noting that an iconic Italian brand is returning to Italian ownership amidst a backdrop where many family-owned businesses have faltered.
This acquisition marks a pivotal moment for both the Prada Group and Versace, as they look to navigate the future of luxury fashion while maintaining their unique identities.