On Thursday, in the largest luxury deal of the year, Prada announced that the Versace bought for 1.25 billion euros ($ 1.38 billion) from Capri Holdings, a besieged New York group that at some point formed itself as the American answer to the large fashion groups of France.
The deal is a sign of confidence in the constant value of Made in Italy at a time when the financial markets are in chaos because of the Whipsawing rate policy of President Trump. And it marks the end of Capri’s attempt to create an American luxury group to match LVMH and Kering, while signaling an attempt by Prada to create an Italian competitor for the powerhouses.
“It is a daring and ambitious move by Prada,” said Robert Burke, the founder of the same name of Robert Burke Associates. “The acquisition would position Prada to diversify his portfolio and compete on a larger global stage.”
Versace will join Prada and Miu Miu, as well as Luna Rossa, the America’s Cup Sailing Team and the Pastry Brand Marchesi as part of the Prada Group, creating a “best in class” mosaic of the Italian Savoir-Faire. (The group also includes the shoe brands of car shoe and church.)
It also gives the fashion of the Prada Group that holds critical masses, so that a ready-made brand is added with a remarkably different identity than that of Miu Miu and Prada-E-Ess one that is not dependent on the designer Miuccia Prada-on the mix.
In a press release, Andrea Guerra, the Chief Executive of Prada Group, said the acquisition: “A new dimension, other and complementary” to the group. “Versace has a huge potential,” he added, as he noticed, “The journey will take a long time.”
Prada plans to finance the acquisition with debts and borrow more than a billion euros. The plan was approved by the boards of both companies and they expect that the deal will close in the second half of the year, pending approval by supervisors.
The Prada Group has been the rare success story during a general recession in the luxury market, reporting 2024 Income From € 5.4 billion, an increase of 17 percent, partly driven by the enormous recent success of Miu Miu, which the retail sale grew by 93 percent last year.
In his most recent, on the other hand financial report Capri, which is also the owner of Michael Kors and Jimmy Choo, said that Versace income would fall to $ 810 million in his current financial year, of $ 1 billion in 2024. Versace was seen as a potential acquisition objective since an attempt by Tapestri would be blocked, that is the coach and Kate promotation. (Speculation that Prada would also buy Jimmy Choo, given the expertise in leather goods, was not confirmed.)
“The Versace activities need a complete change,” says Luca Solca, a senior analyst at the research agency Bernstein. At the same time, he added, the Track Record of Prada with acquisitions “Leave a lot to be desired.”
The acquisition of Versace is indeed not the first attempt by Prada to extend his winning formula to other brands. In 1999, after a decade in which it helped to define Italian fashion, Prada went on a buying spree and acquired Jil Sander and Helmut Lang, two brands that seemed to share an intellectual approach to dress up with the core brand of the group. However, it turned out that the Alchemy Miuccia Prada and her husband, Patrizio Bertelli who created in Prada, was not transferable. The group sold for a long time in 2005 and sold Sander the following year.
Versace gives them the opportunity to rewrite that story.
At first glance, Prada and Versace are a study in contrasts. Versace made his name on a celebration of flash and fantasy, enjoying sun, sex, the male look and the cord between bad taste and elegance. Prada, on the other hand, embraced a contrary exploration of the meaning of femininity, gender politics and the strange allure of ugly chic.
But, Mr. Bertelli said in the press release: “We share a strong dedication to creativity, craftsmanship and heritage”, as well as a understanding of the consumer power of brand semiology – the upward triangle, the Medusa head – and a belief in the importance of family.
Mrs. Prada is close to Donatella Versace, who came in to lead the company that her brother Gianni founded in 1997 after his murder; Although Mrs. Versace left her position as Chief Creative Officer last month after almost 30 years, she remains Chief Brand Ambassador and has always felt a huge sense of responsibility to guarantee the future of her brother’s inheritance. Allegedly she is ‘pleased’ to have her brand back in the hands of family.
Although the Prada group is mentioned on the Hong Kong Stock Exchange, Mr. Bertelli remains chairman. Lorenzo Bertelli, one of the two sons of Mr Bertelli and Mrs. Prada, is Chief Marketing Officer and considered the heir of the company, founded in 1913 by the grandfather of Mrs. Prada. Even the designer who took the place of Mrs. Versace in Versace, Dario Vitale, in the previous 14 years at Miu Miu with Mrs. Prada (who is creative director of Miu Miu and co-creative director of Prada with Raf Simons), eventually getting up to be second in the commando. He comes home effectively.
Capri, on the other hand, has a much shorter genealogy. The group was founded in 2018 when Michael Kors Versace bought for $ 2.1 billion, after the takeover of Jimmy Choo. At the time, Croedwed Chief Executive John Idol, indicated the Versace deal: “Our newest step in creating one of the world’s leading fashion and luxury groups.”
Now Mr. Guerra from Prada maybe say something similar.
