Prada is currently in negotiations to acquire the fashion brand Versace from Capri Holdings, a US investor situated in New York, with a prospective deal price nearing €1.5bn (£1.2bn). Versace, which hails from Milan, and the listed company Capri might solidify this acquisition this month, as reported by Bloomberg; however, discussions could fail to materialize into an agreement.
If the sale finalizes, Versace would once more fall under Italian ownership, and this acquisition would broaden Prada’s market reach, positioning it to contend more effectively with LVMH—the French luxury conglomerate that owns such high-end brands as Louis Vuitton, Moët & Chandon, and Hennessy.
Founded by Mario Prada in Milan in 1913, Prada has been steered by his granddaughter Miuccia Prada since the 1970s. Capri, previously recognized as Michael Kors, made a name change following its acquisition of the footwear brand Jimmy Choo in 2017 and subsequently took over Versace in 2018.
A sale at the current proposed figure of $1.5bn would signify a loss for Capri, as it had initially purchased Versace for $2.1bn in 2018. Despite Versace struggling in recent years, Capri reported that the brand’s revenues for the final quarter of 2024 were $193m, reflecting a 15% decline compared to the same period in the previous year. Capri anticipates fiscal losses this year but expects to break even the following year.
Versace does not produce items like luggage, which historically perform well for brands such as Louis Vuitton during economic downturns. There is also speculation regarding the designer’s role, with questions surrounding whether Donatella Versace will remain at the helm following the potential sale of the company.
During Milan fashion week, Miuccia Prada, the head designer for Prada, indicated that the Versace deal is under discussion by all parties. Prada has been granted access to the latest financial information and sales figures for Versace, completing the initial due-diligence process as reported by Bloomberg.
Capri has expressed optimism regarding Versace’s long-term growth prospects; however, the company’s forecasts predict a decline in sales from $810m in the current fiscal year to $800m in the coming year. Still, they project sales to rise to $900m by 2028 and reach $1.5bn in the long run.
S&P Global Ratings lowered Capri’s credit rating in February, citing concerns over potential repayment issues stemming from performance challenges and high levels of debt. Furthermore, Capri faced a setback in 2024 when the US Federal Trade Commission filed a lawsuit to prevent a proposed merger between Capri and Tapestry, the parent company of the Coach brand, worth $8.5bn.
Source: https://www.theguardian.com/fashion/2025/mar/03/prada-talks-buy-versace-deal
