The acquisition of Milan’s iconic fashion brand Versace by the Prada Group has been finalized in a $1.375 billion US ($1.93 billion Cdn) cash transaction. This move brings together Versace, known for its alluring designs, with Prada’s “ugly chic” style and Miu Miu’s youthful appeal.
The completion of the deal is expected to revitalize Versace’s performance, following a period of lackluster results under the ownership of U.S. luxury group Capri Holdings post-pandemic. Prada confirmed the acquisition’s closure after obtaining all necessary regulatory approvals, with Capri Holdings intending to use the proceeds to reduce its debt.
Donatella Versace expressed her approval of the deal in an Instagram post, coinciding with the birthday of the brand’s late founder, Gianni Versace. In her post, she mentioned her brother’s joy at Versace becoming part of the Prada family, alongside a photo featuring Gianni Versace with Miuccia Prada from 1996.
The future of Versace will be overseen by Prada heir Lorenzo Bertelli, who will take on the role of executive chairman while also serving as the group’s marketing director and sustainability chief. Despite acknowledging Versace’s historical brand recognition, Bertelli emphasized the brand’s underperformance in the market and highlighted its significant growth potential.
The appeal of the acquisition lies in the complementary nature of the brands, with Prada’s minimalist approach complementing Versace’s maximalist style. Industry experts anticipate that revitalizing Versace will require innovative strategies to reinvigorate its appeal and relevance in the competitive fashion market.
Versace has already initiated a creative revitalization under new designer Dario Vitale, showcasing a vibrant collection inspired by the 1980s at Milan Fashion Week. While the runway show received mixed reviews, buyers responded positively to the collection, signaling a promising start for the brand’s rejuvenation efforts.
Capri Holdings, which acquired Versace for $2 billion US in 2018, faced challenges in aligning the brand’s bold image with the trend towards “quiet luxury.” Chairman John D. Idol expressed confidence in Prada’s ability to lead Versace into its next phase of growth, following its acquisition by the Prada Group.
Prada anticipates that Versace will contribute 13% of its pro-forma revenues, with Miu Miu at 22% and Prada at 64%. The Prada Group has already begun integrating Versace into its Italian manufacturing system, leveraging its expertise and capabilities to enhance the brand’s production processes.
The acquisition marks a strategic move by the Prada Group to leverage its strengths and resources to position Versace for sustainable growth and success in the ever-evolving luxury fashion industry.
