Prada Acquires Versace in Major Deal as Italian Luxury Consolidation Accelerates

Prada announced on Tuesday that it has officially acquired Versace, bringing two of Italy’s most iconic luxury fashion houses under the same corporate umbrella. The deal, valued at 1.38 billion dollars, is significantly lower than the nearly 2 billion dollars that Capri Holdings paid for Versace in 2018, marking a steep discount compared with its earlier valuation.

The acquisition strengthens Prada’s growing portfolio of designer labels, which already includes its youth-oriented brand Miu Miu. Analysts say the move positions Prada to better compete with global luxury giants such as France’s LVMH, which owns high-profile brands including Louis Vuitton, Dior, and Fendi. The consolidation reflects a broader trend across the fashion industry, where major houses are expanding through mergers to maintain influence in a highly competitive market.

Versace has undergone major changes in recent years. Donatella Versace, the celebrated designer who led the brand for twenty seven years, stepped down from her role as creative chief in March. She had taken over the company in 1997 after the death of her brother, founder Gianni Versace. Donatella’s departure marked the end of an era defined by bold, glamorous designs and the famous Medusa head logo. She was succeeded by Dario Vitale, formerly a design director at Miu Miu, suggesting closer creative alignment between Versace and its new parent company.

Capri Holdings’ decision to sell Versace at what amounts to a roughly 700 million dollar loss reflects the company’s recent struggles. Versace’s sales slowed in the past few years, and Capri’s other labels, including Michael Kors and Jimmy Choo, also experienced weaker performance. Industry observers note that under Capri’s ownership, Versace shifted away from its signature ornate designs to adopt more minimalist trends while also raising prices, a strategy that received mixed reactions from loyal customers.

Prada confirmed the acquisition through a brief statement, noting that all regulatory approvals had been secured. The purchase is expected to help revive the Versace brand by returning it to its creative roots while leveraging Prada’s design expertise and global distribution capabilities. Andrea Guerra, Prada’s chief executive, previously described Versace as having “huge potential,” highlighting the opportunities the brand still holds within the global luxury market.

For Capri Holdings, the sale provides much needed financial relief. The company said it will use proceeds from the deal to significantly reduce debt. Capri chief executive John D Idol stated that paying down liabilities will strengthen the company’s balance sheet and allow it to refocus on improving performance across its remaining brands.

The acquisition marks a notable moment in Italian fashion, as two of the country’s most influential labels unite during a period of industry transformation. With Prada now guiding Versace’s future direction, fashion watchers will be paying close attention to how the brand evolves under new leadership.