Prada in talks to buy Versace in €1.5 billion deal, returning iconic brand to Italian ownership

Prada is reportedly in discussions to acquire the Versace fashion brand from US-based Capri Holdings, with a potential deal valued at nearly €1.5 billion. The Milan-based luxury house and the New York-listed Capri could finalise an agreement as early as this month, although negotiations remain uncertain.

If successful, the acquisition would return Versace to Italian ownership and bolster Prada’s position in the luxury market, positioning it to better compete with France’s LVMH, the conglomerate behind Louis Vuitton, Moët & Chandon, and Hennessy.

Founded in 1913 by Mario Prada, Prada has been under the leadership of his granddaughter, Miuccia Prada, since the 1970s. Capri Holdings, previously known as Michael Kors, acquired Versace in 2018 after taking over shoemaker Jimmy Choo in 2017.

However, selling Versace at $1.5 billion would represent a financial loss for Capri, which originally purchased the brand for $2.1 billion. Versace has faced challenges in recent years, with its revenues falling 15 per cent in the final quarter of 2024 to $193 million. It is expected to post losses this financial year but aims to break even in the next.

Unlike brands such as Louis Vuitton, which benefit from strong sales of luggage and accessories during economic downturns, Versace lacks such resilient product lines. The brand also faces uncertainty regarding the future of its creative director, Donatella Versace, who has led the house since the tragic death of her brother, Gianni Versace, in 1997.

At Milan Fashion Week, Prada’s design head, Miuccia Prada, acknowledged that discussions about Versace were a major topic. Bloomberg reports that Prada has gained access to Versace’s latest financial and sales data following initial due diligence.

Despite Capri’s optimism about Versace’s long-term growth, sales projections indicate a decline from $810 million in the current financial year to $800 million next year, though a rebound to $900 million is expected by 2028, with potential growth to $1.5 billion in the future.

Following news of the possible Versace acquisition, Prada’s Hong Kong-listed shares rose by 3.5 per cent on Monday. Both Prada and Capri declined to comment on the ongoing discussions.

Featured Image: Prada & Versace / Instagram