Prada to Acquire Versace in a $1.38 Billion Deal

In a move that's got fashionistas and financiers alike doing double-takes, Prada just sealed the deal to acquire iconic rival Versace for a spicy $1.38 billion. That’s right, two of Italy’s biggest fashion powerhouses are now under one chic umbrella. And while some are calling it a gamble, others are saying Prada just flexed a strategic muscle that could reshape the game in global luxury fashion. Let’s unpack this high-stakes glam merger.

From "Ugly Chic" to Blinged-Out Bombshells

On paper, Prada and Versace seem like an odd fashion couple. The Prada Group is an artsy intellectual, think black turtlenecks and minimalist cool. Versace? All glitter, glam, and Medusa heads, more Miami yacht party than Milan think tank. Miuccia Prada, known for turning “ugly” into high fashion, once described her designs as "ugly clothes in hideous fabrics." Versace, under Donatella’s bombshell reign, built its brand on sex appeal, bold prints, and red-carpet drama. But here's the kicker, they complement each other like espresso and biscotti.

As Prada Group Chairman Patrizio Bertelli put it: “We aim to continue Versace’s legacy celebrating and re-interpreting its bold and timeless aesthetic… while providing it with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships.

Timing Ain’t Just a Fashion Thing

So why now? Why spend $1.38 billion (a $200 million markdown, by the way, thanks to Trump’s tariff turbulence) on a brand that’s been losing its shine? For one, Prada is riding high. In 2024, it posted €5.4 billion ($6B) in revenue, a 17% jump, thanks in part to Miu Miu’s Gen Z glow-up. Meanwhile, Versace’s revenues dipped 15% in Q3 of 2025, dragging Capri Holdings’ total sales down to $5B across all brands.

Source: Yahoo Finance

This is Prada stepping up its game while everyone else hits snooze. Analysts agree. Pauline Brown, former LVMH exec, told Yahoo Finance, “The acquisition of Versace brings their portfolio up to seven [brands]… It gives the Prada Group more breadth and depth of Italian brands and a stronger position within the global luxury sector.”

And the broader luxury market? It's taking hits. Just this week, Hermès overtook LVMH as the world’s most valuable luxury company, after LVMH shares dropped 7.5% on weak Q1 sales in fashion and leather goods. Meanwhile, Hermès, buoyed by exclusivity and ultra-loyal clientele, only dipped 0.4%. Even Prada wasn’t immune, falling 4.2% in the same session. Trump’s fresh wave of tariffs, now hovering at 10–20% for EU goods, is adding fuel to the fire, stalling recovery hopes across the sector.

When the Market Zigs, Prada Zags

Here’s the juicy bit, Versace was originally acquired by Capri for $2.12 billion in 2018. Fast forward to 2025, with geopolitical chaos and sluggish sales, Prada swoops in for nearly $800 million less. Capri Holdings CEO John Idol didn’t sugarcoat it: “This transaction reflects our commitment to increase shareholder value, strengthen our balance sheet, and power the future growth of Michael Kors and Jimmy Choo.” But Prada isn’t chasing discounts, it’s playing the long game. “This is not a cost-saving deal,” Prada CEO Andrea Guerra emphasized in a recent call. “It’s a long-term project aimed at expanding revenues.” Translation: it’s about synergy, not slash-and-burn.

Donatella Passes the Torch

A major headline? Donatella Versace is stepping down as chief creative officer after nearly 30 legendary years. She’s sliding into a new role as chief brand ambassador, overseeing red-carpet looks and philanthropy. Dario Vitale, formerly of Miu Miu and Gucci, is taking the creative reins. Insiders say his hire was a clear signal the deal was nearing the finish line. And with his Gen Z–friendly design chops, he’s got the right touch to breathe new life into Versace’s glam DNA. Donatella herself is on board: “Gianni and I have always had a huge admiration for Miuccia, Patrizio, and their family. I am ready to support this new era for the brand in any way that I can.”

Will History Repeat Itself?

Let’s not forget, that Prada has been down this M&A runway before. Back in the late '90s, they scooped up Jil Sander, Helmut Lang, and Alaïa. Spoiler: it didn’t end well. By 2007, those brands were gone, casualties of culture clashes and financial missteps. So, what’s different now? Focus. Back then, Prada was collecting brands like NFTs. Today, it’s crafting a deliberate strategy to build an Italian luxury empire that can stand toe-to-toe with LVMH and Kering. With Versace in its arsenal, Prada is betting big, but betting smart.

This Deal’s Dripping in Potential

This acquisition isn’t just about two fashion houses playing dress-up. It’s about Italy fighting back in a luxury market long dominated by the French. Sure, it comes with risks, market volatility, creative transition, and the pressure to revive a brand that’s seen better days. But if Prada nails the execution, this could be a blockbuster that reshapes luxury’s future. Versace may be the party animal, and Prada the intellectual—but together, they just might throw the fashion world’s most profitable afterparty. Want more hot takes like this? Subscribe to MYCPE ONE and stay ahead of the finance curve.