Prada Acquires Versace for $1.38 Billion, Marking a New Era for Italian Luxury Fashion

In a landmark move set to reshape the global luxury fashion landscape, Prada has agreed to acquire its long-time rival Versace from U.S.-based Capri Holdings for €1.25 billion ($1.38 billion), including debt. The deal cements the union of two of Italy’s most iconic fashion houses, forging a domestic powerhouse capable of competing with French titans like LVMH and Kering.

Announced Thursday, the acquisition comes at a pivotal time for the global luxury industry, which has seen demand slow amid macroeconomic headwinds. For Prada, the move signals ambition: to consolidate market share and maintain momentum amid tightening global conditions. For Versace, the deal offers a lifeline after recent years of financial instability and creative transition.

A Strategic Power Play for Italian Fashion

The combined entity is expected to generate more than €6 billion in annual revenue, according to industry estimates — a significant boost that places it in stronger contention against global luxury groups currently dominating the market.

“This acquisition is a milestone not just for Prada, but for the future of Italian fashion,” said Patrizio Bertelli, Chairman of Prada. “We aim to continue Versace’s legacy, celebrating and reinterpreting its bold and timeless aesthetic. At the same time, we will provide it with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships.”

Bertelli, who co-leads Prada with his wife Miuccia Prada, emphasized the importance of preserving Versace’s creative spirit while integrating it into a larger, more resilient business structure.

Versace's Struggles and the Exit of Donatella

The deal follows the March 13 announcement that Donatella Versace — sister of the brand’s late founder Gianni Versace — would step down as chief creative officer. Her departure marks the end of an era for the label, known for its flamboyant glamour and unapologetic opulence.

Under Capri Holdings, Versace struggled to maintain consistent profitability, weighed down by high production costs, fluctuating sales, and an increasingly competitive luxury market. The brand’s U.S.-based parent company acquired Versace in 2018 for $2.1 billion, but the expected turnaround never fully materialized.

Revitalizing a Legacy Brand

For Prada, the acquisition offers the chance to revive one of fashion’s most recognizable names. Analysts suggest Prada’s vertically integrated operations and brand management expertise could help streamline Versace’s business, improve margins, and reignite global growth.

“Versace remains an iconic name, but it’s lacked operational discipline in recent years,” said Elena Santini, a Milan-based luxury industry analyst. “Prada’s stewardship could provide the structure and scale that Versace needs to compete in today’s landscape.”

While details on Versace’s future leadership have yet to be disclosed, sources close to the matter indicate that Prada may appoint a new creative team later this year, with a focus on modernizing the brand without losing its identity.

Competing in a Changing Market

The acquisition comes amid a broader recalibration in the luxury industry. A slowdown in the U.S. and Chinese markets, rising inflation, and shifting consumer habits have pressured brands to adapt quickly — either through digital transformation, market expansion, or consolidation.

Prada, by contrast, has posted strong earnings and resilient sales, positioning itself as a buyer rather than a target in a period where many brands are seeking strategic alliances or buyouts.

“Prada’s financial discipline and brand clarity gave it an edge in this transaction,” said Luca Bonetti, managing director at Milan-based luxury advisory firm Bonetti & Partners. “This move signals Italy’s renewed ambition to defend and promote its heritage in a luxury world long dominated by French giants.”

A New Chapter for Italian Luxury

The deal also carries symbolic weight: an Italian company reclaiming and revitalizing an Italian brand, restoring creative and corporate control to its home soil after years of foreign ownership.

With the deal expected to close in the second half of 2025 pending regulatory approval, attention now turns to how Prada will integrate Versace — and whether the fusion of two distinct fashion houses can spark a new golden era for Made in Italy.