Luxury Powerhouse Shift: Prada Acquires Iconic Versace in Billion-Dollar Deal

In a significant move poised to reshape the global luxury market, Italian fashion giant Prada has announced its acquisition of Versace. The deal brings two of Italy’s most prestigious design houses under a single corporate umbrella, expanding Prada’s extensive portfolio which already includes Miu Miu.

The acquisition, valued at $1.38 billion (£1.04 billion), marks a notable shift in the valuation of Versace. This price is considerably lower than the approximately $2 billion that Versace’s previous owner, Capri Holdings, paid for the brand in 2018. Millenium TV understands this strategic purchase is aimed at bolstering Prada’s competitive stance against formidable rivals such as French conglomerate LVMH, which boasts luxury titans like Dior, Fendi, and Louis Vuitton.

The sale follows a period of change for Versace, including the departure of iconic designer Donatella Versace from her role as creative chief in March after 27 years. She had taken the reins of the company in 1997, following the tragic murder of her brother Gianni, the brand’s founder. Dario Vitale, a former design director at Miu Miu, has since assumed the creative leadership. Sources tell Millenium TV that the sale reflects a loss of roughly $700 million for Capri Holdings, attributed to a slowdown in Versace’s sales, alongside other brands within Capri Holdings’ portfolio such as Michael Kors and Jimmy Choo.

Under Capri Holdings’ ownership, Versace saw a strategic shift away from its signature ornate designs towards a more minimalist aesthetic, accompanied by price increases. Prada confirmed the successful completion of the acquisition in a statement on Tuesday, noting that all necessary regulatory clearances had been secured. Capri Holdings CEO John D. Idol stated that the proceeds from the sale are crucial for the company’s financial health. “We plan to use the proceeds to repay the majority of our debt, which will substantially strengthen our balance sheet,” Idol explained.

Andrea Guerra, the chief executive of Prada, previously expressed strong confidence in Versace’s future potential earlier this year. “The journey will be long and will require disciplined execution and patience,” Guerra remarked, highlighting the long-term vision for the newly acquired brand.