Prada (PRDSY) has formally agreed to buy Versace from U.S. luxury group Capri Holdings (CPRI) for $1.38 billion, combining two Italian fashion brands under one roof.
The deal, expected to close in the second half of this year, values Versace at less than the $2.12 billion Capri paid for the brand in 2018. The sale enables Capri to “accelerate its strategic investment in Michael Kors,” the company said in a press release.
Prada’s acquisition of the Medusa-emblazoned fashion house marks the brand’s return to Italy. Versace will join Prada Group’s $15 billion portfolio of brands, which includes its flagship Prada, Miu Miu, Church’s, Car Shoe, Marchesi 1824 and Luna Rossa.
“The Bertelli family has long aspired to create an LVMH-like group in Italy,” Pauline Brown, former LVMH North America chair, told Yahoo Finance via email. “The Versace acquisition would bring their portfolio to seven brands. This is a smart strategy in my opinion, as it gives the Prada Group a greater breadth and depth of Italian brands and a stronger position in global luxury.”
In 2024, the Prada Group reported total revenues of €5.4 billion (about $6 billion), up 17% year-over-year. Prada Group’s second-largest brand, Miu Miu, particularly withstood the slowdown in luxury retail last year, with sales up 93.2%, according to its shareholder report.
LVMUY, the world’s largest luxury brand, had revenues of nearly €85 billion (US$95 billion) last year, while Hermès had revenues of €15.2 billion (nearly $17 billion).
Luxury retail has been consolidating and becoming increasingly competitive over the years: Kering owns brands like Bottega Veneta and Balenciaga, while Tapestry owns brands like Coach, Kate Spade and Stuart Weitzman. Capri is taking the same approach when it adds Versace, Jimmy Choo and Michael Kors to its American brands.
When Capri Holdings acquired Versace in 2018, executives saw it as an opportunity to help Versace grow to $2 billion in revenue, Jimmy Choo to $1 billion and Michael Kors to $5 billion. However, after four years of lackluster performance, Capri Holdings began considering selling both Versace and Jimmy Choo as their businesses continued to struggle.
In 2024, Versace reported revenues of $1 billion, while Jimmy Choo’s full-year revenues were $618 million. Michael Kors, the Capri Group’s largest brand, reported revenues of $3.5 billion. Capri Group’s total revenues for all brands are $5 billion. Capri Group is rumored to be considering selling Jimmy Choo.
As part of the Prada-Versace deal, Donatella Versace, sister of brand founder Gianni Versace, will step down as chief creative officer after nearly 30 years and become chief brand ambassador. Dario Vitale, a designer who has designed for Bottega Veneta, Gucci, Miu Miu and Prada, will succeed her.
“Our goal is to continue Versace’s legacy, celebrating and reinterpreting its bold and timeless aesthetic,” said Patrizio Bertelli, chairman of the Prada Group, in a statement. “At the same time, we will provide it with a strong platform and consolidate its position through years of sustained investment and a platform rooted in a long-term partnership.”
