ROME (AP) 鈥 The Prada Group announced a deal Thursday to buy crosstown Milan fashion rival Versace from the U.S. luxury group Capri Holdings under terms that values one of the most recognizable names in Italian fashion at 1.25 billion euros ($1.4 billion).
The deal will put known for sexy silhouettes and bold Greco and Medusa motifs, under the same roof as Prada鈥檚 鈥渦gly chic鈥 aesthetic and the youth-driven Miu Miu whose stunning growth in recent years has far outpaced the market. said the 47-year-old Versace brand offered 鈥渟ignificant untapped growth potential.鈥欌
鈥淭his is exactly the strength for our group. There are no overlaps in terms of creativity, in terms of customer,鈥 said Lorenzo Bertelli, Prada鈥檚 chief marketing officer, who is being groomed to one day take over the business that his parents 鈥 Miuccia Prada, the group's creative force and largest shareholder, and Patrizio Bertelli, its chairman and executive director 鈥 have turned into a global fashion juggernaut.
鈥淲e are buying a brand with huge potential, with a very recognizable aesthetic," Lorenzo Bertelli said, underlining that the Versace brand name recognition, putting it among the top 10 in the world, far outweighs its business performance.
The final value of the deal will be adjusted at closing, which is expected in the second half of the year, the Prada Group said. It will be funded by 1.5 billion euros in new debt and has been approved by the Prada and Capri Holdings board of directors.
Prada Chief Executive Andrea Guerra said the deal was aimed at building a 鈥渟ustainable revenue growth鈥 and boosting the brand's identity, and was not about squeezing synergies. Prada's statement underlined that Versace will 鈥渕aintain its creative DNA and cultural authenticity, 鈥 while benefitting from its 鈥渋ndustrial capabilities, retail execution and operations expertise. 鈥
There are no plans to change the CEO and Miuccia Prada will not be involved in the creative side of Versace, the executives said. Guerra added that the recent creative shakeup at Versace, with Miu Miu head of design Dario Vitale replacing as creative director effective April 1, had nothing to do with the deal. He called it 鈥渁n independent, very personal鈥 decision by Vitale.
Lorenzo Bertelli said the experience of Miu Miu's growth had shown that small changes can make all the difference. 鈥漌e don't need to change the brand, revolutionize it. We need to just evolve it, make the right things happen, and all together they are hopefully going to bring a huge spark and bring back Versace to be a huge success,'' he said.
Capri Holdings, which owns Michael Kors and Jimmy Choo, paid $2 billion for Versace in 2018, but had been struggling to position Versace鈥檚 bold profile in the recent era of 鈥渜uiet luxury.鈥
Versace represented 20% of Capri Holdings 2024 revenue of 5.2 billion euros. An analyst presentation for the Prada deal said that Versace would represent 13% of the Prada Group's pro-forma revenues, with Miu Miu coming in at 22% and Prada at 64%. The Prada Group, which also includes Church鈥檚 footwear, reported a 17% boost in revenues to 5.4 billion euros last year.
Donatella Versace, who took over as creative director at the fashion house founded by her brother, Gianni Versace, after his 1997 murder, continues with the fashion house in the new role of chief brand ambassador.
鈥淚 am absolutely delighted to become part of the Prada family,'' she wrote in a post on Instagram beneath a photograph of herself and Miuccia Prada. 鈥滻 am honored to have the brand in the hands of such a trusted Italian family business, and I am ready to support this new era for the brand in any way I can.鈥
The Italian government welcomed a deal that appears to secure Versace's longer term future as other family-owned fashion brands have faltered or even disappeared after opening up to outside investors.
"An historic 鈥楳ade in Italy鈥 brand is Italian again,'' Industry Minister Adolfo Urso said.