In a major move set to reshape the luxury fashion landscape, Prada has officially announced the acquisition of Versace from Capri Holdings in a deal valued at €1.25 billion. The transaction brings the iconic Italian fashion house back under local ownership, aligning with Prada’s ambitions to expand its influence in the global luxury market and position itself as a dominant force in the sector.

Capri Holdings, which also owns Michael Kors and Jimmy Choo, initially acquired Versace in 2018 for approximately €1.8 billion. However, despite the brand’s strong heritage and recognition, Versace has faced significant financial challenges in recent years. The brand reported a 15% decline in revenue, with the third quarter of its fiscal year seeing a disappointing $193 million in sales. This underperformance has placed increasing pressure on Capri Holdings, which has been looking to divest the brand as part of its broader strategy to streamline its portfolio.

For Prada, the acquisition represents a key step in diversifying its brand portfolio and extending its reach to a broader segment of luxury consumers. By bringing Versace under its wing, Prada aims to capitalize on the brand’s iconic status and global appeal, while also addressing the challenges it faces in terms of brand revitalization and market positioning.

Andrea Guerra, CEO of Prada, spoke about the immense potential of Versace and the brand’s strategic fit within Prada’s broader vision. “This acquisition is an important milestone in Prada’s continued growth. Versace has a rich heritage, and with the right strategic execution, we believe it has the potential to reach new heights in the global luxury market,” said Guerra. He emphasized that revitalizing the brand would require careful attention to its identity and leveraging its cultural cachet to appeal to modern luxury consumers.

This acquisition also strengthens Prada’s ability to compete more effectively with other major players in the luxury sector, particularly French luxury conglomerates such as LVMH and Kering. By acquiring Versace, Prada bolsters its position in the Italian luxury market, ensuring that Italy maintains a strong presence in the global luxury fashion scene.

The €1.25 billion price tag is notably lower than the €1.8 billion that Capri Holdings paid for Versace in 2018. This discount reflects not only Versace’s recent financial struggles but also the broader challenges faced by the luxury fashion sector, as global economic uncertainties continue to impact consumer spending in high-end markets. Despite this, Prada’s acquisition of the brand demonstrates a vote of confidence in Versace’s long-term potential.

As Prada sets its sights on revitalizing Versace, the luxury industry will be watching closely to see how the brand’s legacy can be reimagined to meet the demands of today’s consumers. The deal marks a new chapter for both Prada and Versace, and it will likely have significant ramifications for the competitive landscape of the global luxury fashion market.