Prada has acquired Versace from Capri Holdings in a €1.25 billion cash transaction, concluding a series of exclusive negotiations that began earlier this year. The deal, confirmed Thursday, marks one of the most significant shifts in the Italian luxury sector in over a decade.
Versace had been under the ownership of Capri Holdings since 2018, when the American group acquired the brand for approximately $2.1 billion, including debt. At the time, Capri – formerly known as Michael Kors Holdings – announced plans to create a multi-brand luxury group with Versace as its European anchor. However, Versace’s performance under Capri fell short of expectations. The brand experienced inconsistent growth and faced difficulty aligning with changing consumer preferences, particularly the shift toward subtler design and more restrained spending habits among high-income customers.
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The acquisition brings two high-profile Italian fashion houses under one roof. According to Prada Group projections, combined annual revenues from Prada and Versace are expected to surpass €6 billion. This gives Prada the scale to more directly challenge the dominance of LVMH and Kering, both of which have continued to grow through acquisitions and aggressive global expansion. Prada Chairman Patrizio Bertelli emphasized that the group would provide Versace with the operational support and global platform it lacked under Capri, while maintaining the distinct design codes that made the label internationally recognizable.
Leadership changes at Versace preceded the deal’s finalization. In March, Donatella Versace announced she would step down as chief creative officer after leading the brand for nearly three decades. She assumed control in 1997 following the murder of her brother, Gianni Versace, who founded the Milan-based label in 1978. Effective April 1, Donatella has transitioned to a new role as chief brand ambassador. Her replacement, Dario Vitale, formerly the design and image director at Miu Miu, was named chief creative officer. At Miu Miu, Vitale played a key role in driving commercial growth and broadening the brand’s appeal to younger consumers. His appointment signals Prada’s intention to reposition Versace while expanding its relevance to a new generation.
Industry analysts have pointed out that the €1.25 billion price tag represents a substantial discount from Capri’s original purchase figure. The drop reflects both Versace’s uneven financial performance in recent years and broader pressures affecting the luxury sector, including global economic uncertainty, softening demand in China, and disrupted retail operations across key markets. The Financial Times previously reported that initial discussions centered on a valuation closer to $1.6 billion, but those expectations were lowered during the due diligence period.
Early in the process, there was speculation that Prada might acquire both Versace and Jimmy Choo from Capri Holdings. Sources close to the negotiations confirmed that discussions at one point included both labels. However, the final agreement includes only Versace. Capri Holdings has not announced new plans for Jimmy Choo, though it is expected to explore further options for streamlining its portfolio.
This marks Prada’s largest deal since the late 1990s, when the company acquired stakes in Helmut Lang and Jil Sander. Those investments were later divested, and Prada had since taken a cautious approach to expansion, focusing instead on strengthening its own labels and scaling its retail network globally. The purchase of Versace signals a shift in strategy, timed with market conditions that have made some assets more accessible to buyers with long-term capital.
The deal also returns Versace to Italian ownership for the first time since 2018. It reflects a growing effort by Italian firms to maintain domestic control over fashion institutions amid decades of foreign acquisitions. With Versace now operating under Prada Group, the combined force of the two brands could reshape Italy’s role in the global fashion economy, giving Prada both the scale and brand depth to pursue new international opportunities while maintaining creative independence across its houses.
Images from Versace Presents FW25 Collection – see full collection here.
