On Thursday, Prada announced that it will purchase Versace for 1.25 billion euros ($1.38 billion) from Capri Holdings, in its biggest luxury deal of the year.
The deal is a sign of faith in the continuing value that took place in Italy during a time when financial markets are turmoil due to President Trump's whipping tariff policy. And it shows Prada's attempt to create an Italian competitor in the Powerhouse, as Capri announces the end of an attempt to rival LVMH and Kering by creating an American luxury group.
“It's a bold and ambitious move by Prada,” said Robert Burke, who is named after Robert Burke Associates. “This acquisition will encourage Prada to diversify its portfolio and compete on a larger global stage.”
Versace joins pastry brand Marquesi as part of Prada and Miu Mew, the America's Cup Sailing Team and the Prada Group to create the “best in class” mosaic of Italian Savoie Fair. (The group also includes footwear brand car shoes and churches.)
It also offers a critical mass that preserves the fashion of the Prada Group, adding ready-made brands with a particularly different identity, with Miu Miu and Prada identities (those that do not rely on designer Miuccia Prada).
In a news release, Andrea Guerra, chief executive of Prada Group, said the acquisition will add to the group that it is “a new dimension, a different complementary and complementary.” “Versace has great potential,” he added, “the journey will be long.”
Prada will fund the acquisition with debt and borrow more than 1 billion euros. The plan has been approved by both companies' boards and is pending regulatory approval, so we hope that transactions will close later this year.
The Prada Group is an unusual success story during a general recession in the luxury market, increasing revenue in 2024 by 17%, partly due to the recent huge success of Miu MIU, which experienced 93% retail sales growth last year.
In contrast, the latest financial report, also owned by Michael Kors and Jimmy Chew, predicts Versace's revenue will fall from $1 billion in 2024 to $810 million this fiscal year. (Given Prada's expertise in leather products, there was no burning speculation that Jimmy Chew would also buy it.)
“Versace's business requires a complete shift,” said Luca Solca, a senior analyst at Bernstein, a research firm. At the same time, he added that Prada's track record with the acquisition “has a great deal left to be desired.”
In fact, Versace's acquisition is not Prada's first attempt to expand its winning formula to other brands. In 1999, a decade after helping to define Italian fashion, Prada continued his purchases and acquired Jil Sander and Helmut Lang. However, it turns out that the alchemy Muccia Prada and her husband Patrizio Bateri were unable to transfer the Patrizio Bateri created in Prada. The group sold the Lang in 2005 and the Thunder the following year.
Versace gives them the opportunity to rewrite the story.
Prada and Versace are, on the surface, contrasting studies. Versace named the Flash and fantasy celebrations, welcomed them in the sun, and walked the tightrope between sex, male gaze, taste and elegance. In contrast, Prada embraced the opposite quest for femininity, gender politics, and the strange charm of ugly chic.
However, in a news release, Bertelli said “we share a strong commitment to creativity, craftsmanship and heritage,” and expressed his understanding of the consumer power of brand semiotics, namely the upward triangle, Medusa Head, and the belief in the importance of family.
Mrs. Prada is close to Donatera Versace. Donatera Versace intervened to run his brother Gianni, founded after the assassination in 1997. Although Versace left her position as Chief Creative Officer last month after almost 30 years, she remains the ambassador for the Chief Brand and has always felt a great sense of responsibility to secure the future of her brother's legacy. She is reportedly “happily” to bring her brand back to the family's hands.
Prada Group is listed on the Hong Kong Stock Exchange, but Beltelli remains chairman. Lorenzo Bateri, one of Mr. Berteri and Mrs. Prada's two sons, is Chief Marketing Officer and is considered to be the apparent heir to the company founded in 1913 by Mrs. Prada's grandfather. Even the designer who won the position of Versace in Versace's Dario Vitale, has worked with Mr. Miu Miu (creative director of Mew Mew and co-creation director of Raf Simons and Prada) for the past 14 years to become second commander before eventually breaking into Versace. He's effectively gone home.
Capri, on the other hand, has a much shorter genealogy. The group was created in 2018, when Michael Kors acquired Versace for $2.1 billion after the acquisition of Jimmy Chew. At the time, CEO John Idol, signalled the Versace deal “the latest steps to creating one of the world's leading fashion and luxury groups.”
Now, Mr. Guerra of Prada might say something similar.
