Prada Acquires Versace in Landmark USD 1.4 Billion Deal Amid Trade Turmoil

In a bold shift that reconfigures the global luxury fashion world, Prada has made a move, the Italian fashion house announced its acquisition of  Versace in a cash deal valued at about USD 1.4 billion.

This is a big one for Prada, its largest transaction in the company’s history, and it brings one of the most recognizable names in fashion back into Italian hands. Earlier, Versace was under U.S.-based Capri Holdings  for about seven years. Expected to close in 2025, the acquisition signals that Prada wants to be among the top players in the luxury game.

Challenges Shape a Lower Valuation

Capri Holdings, parent company of not just Versace but also Michael Kors and Jimmy Choo, originally picked up the Italian fashion house for about $2.1 billion in 2018. But a series of recent financial reports told a troubling tale: Although revenue for the luxe label rose 17 percent to $240 million in the year that ended last June, profits fell 44 percent, to just $27 million. Even the 17 percent jump in revenue wasn't terrific when you consider that it was growing from a quite low base. The same reports warned of likely downturns in both revenue and profits, in part because of more downturns in the flashy luxury segment of the overall luxury market.

Leadership Changes Set the Stage

In the weeks leading up to the acquisition's announcement, Donatella Versace left her position as creative director, a role she had held since 1997, when she took over after her brother, Gianni Versace, the brand's founder, was killed. Dario Vitale, who has worked for the youth-oriented label Miu Miu, under Prada's umbrella, is now leading the Versace brand. His appointment comes as part of a strategy to refresh Versace's appeal among younger consumers. With this shift, Donatella takes on a more ambassadorial role. Miu Miu under Vitale has a shared vision with Miu Miu under Donatella.

Prada Eyes Global Expansion Despite Tariff Risks

The acquisition moves forward despite ongoing trade tensions that threaten the global luxury business. Rising tariffs on European goods, imposed by former U.S. President Donald Trump, made it tougher for companies like Capri to turn a profit on imported high-end goods. Those economic clouds haven't fully cleared, but they didn't stop Prada from acquiring the jewelry brand. To the contrary, it signals Prada's solid long-term vision, one that's about building not just a far-flung luxury portfolio but also a more competitive Prada in a market growing ever more consolidated.