Style model Prada has agreed to purchase its smaller rival Versace for $1.38bn from Capri Holdings, bringing collectively two of the largest names in Italian vogue and the prospect of enhanced revenues.
The deal was introduced on Thursday.
Prada is in search of to broaden, having defied a slowdown in luxurious demand, whereas Versace has been working at a loss in latest quarters. Owning Versace, with its bold, baroque-style prints, will convey new prospects to Prada, recognized for its minimalist fashion.
“There aren’t any overlaps by way of creativity, by way of prospects,” mentioned Lorenzo Bertelli, advertising and marketing director and a member of the household that controls Prada.
The merger strengthens Italy’s hand in a luxurious trade led by French conglomerates, the largest being Louis Vuitton owner LVMH.
“We are going to present [Versace] with a powerful platform, strengthened by years of ongoing investments and rooted in longstanding relationships,” Prada chairman Patrizio Bertelli mentioned in an announcement.
Bertelli is the husband of Prada designer Miuccia Prada, and the couple are main shareholders within the firm.
Prada and Capri braved the uncertainty about US tariffs and market volatility to signal the deal, based on folks conversant in the matter who spoke to The Related Press.
Capri wanted to divest Versace to deal with turning round its Michael Kors vogue model, one of many sources mentioned. For Prada, the guess on Versace comes at a time when it’s seeking to revive development as its present steady of manufacturers begin to mature, the supply added.
Each Prada and Versace, which have world provide chains and boast of a widespread buyer base, have been keen to “swallow a bunch of geopolitical danger” to get the deal finished, the supply mentioned.
The acquisition is a long-term challenge for Prada and is aimed primarily at increasing revenues reasonably than value financial savings, Prada Chief Govt Andrea Guerra informed analysts in a convention name.
It follows the announcement on March 13 that Donatella Versace was stepping down because the chief inventive officer of the model based by her late brother Gianni in 1978.
“Gianni and I’ve at all times had an enormous admiration for Miuccia, Patrizio and their household,” Donatella mentioned. “I’m able to assist this new period for the model in any method that I can.”
A reduced value
On Wall Avenue, Capri Holdings’ shares tumbled 9 p.c in New York and are down practically 30 p.c because the begin of 2025, with analysts noting the deal valuation was decrease than anticipated.
The value Prada has agreed to pay for Versace, which incorporates debt, is a giant low cost to the roughly $2.15bn, together with debt that US-based Capri, then generally known as Michael Kors, paid for Versace in 2018 when it was bought by the Versace household and Blackstone.
Prada began to discover a deal for Versace final yr when Capri’s sale to Tapestry, whose manufacturers embrace Coach and Kate Spade, was scrapped after being challenged by antitrust regulators, a second supply informed The AP.
The acquisition value of $1.4bn for Versace barely modified since negotiations progressed critically in January, the sources added.
“This transaction displays our dedication to extend shareholder worth, strengthen our steadiness sheet and energy the longer term development of Michael Kors and Jimmy Choo,” mentioned Capri CEO John Idol.
Prada mentioned it had dedicated to 1.5 billion euros ($1.68bn) of recent debt to fund the deal, which is predicted to shut within the second half of the yr.
The deal comes at a time when a number of acquisitions and IPOs have been scuttled within the wake of a worldwide fairness sell-off and fears of recession triggered by US President Donald Trump’s new tariffs this month.
New course
Since Prada’s acquisitions on the finish of the Nineteen Nineties of Helmut Lang and Jil Sander, which main Prada shareholder Bertelli known as “strategic errors”, the group has largely steered away from main dealmaking.
The Versace acquisition marks a significant shift within the group’s technique and comes two years after the appointment of Guerra on the helm, a job beforehand held by Patrizio Bertelli and Miuccia Prada. It additionally displays the rising affect of Lorenzo Bertelli, their son, who is predicted to turn into CEO sooner or later.
Prada traces its roots again to a leather-based items store based in Milan by Miuccia Prada’s grandfather in 1913.
The Versace label, recognized for its Medusa head emblem, was based by Gianni Versace in Milan. Donatella turned its inventive pressure following the killing of Gianni in Miami in 1997.
Listed in Hong Kong, Prada has expanded quickly beneath Miuccia and Bertelli, proudly owning different manufacturers together with the fast-growing Miu Miu and Church’s footwear.
