Prime Highlights: 

Milan-based Prada is negotiating to purchase the Versace brand from Capri Holdings for nearly €1.5 billion. 

The acquisition could be finalized within the month, potentially bringing Versace back under Italian ownership. 

The acquisition would help Prada expand and compete more effectively with LVMH, the owner of luxury brands like Louis Vuitton. 

Key Background: 

Iconic Versace fashion brand will be acquired by Prada from US owned Capri Holdings for nearly €1.5 billion. The transaction would be completed within a month and bring back Versace under Italian ownership which would mark a significant victory for Prada and help it establish dominance in the highly-competitive market. The deal would also challenge French luxury group LVMH, the owner of Louis Vuitton and Moët & Chandon brands. 

Prada, established by Mario Prada in Milan in 1913, has been controlled and run by his granddaughter Miuccia Prada since the 1970s. Versace was acquired by Capri Holdings and then Michael Kors in 2018 for $2.1 billion but has faced challenges in the recent years. Versace sales dropped by 15% in last quarter of 2024, prompting questions about its financial health. Despite these setbacks, Capri remains optimistic about Versace’s long-term growth potential, projecting future revenue increases. 

The acquisition of Versace would not only strengthen Prada’s portfolio but also broaden its competitive edge within the luxury fashion sector. Miuccia Prada has indicated that the deal is on everyone’s table, and the company has already gained access to Versace’s financials as part of its due diligence process. 

Following the announcement, shares of Prada rose by 3.5%. While a deal would represent a loss for Capri, it could provide a fresh opportunity for Versace under Prada’s stewardship, with potential for revitalization and growth in the years ahead. 

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