Prada Grows Its Luxury Empire
Prada announced on Tuesday that it acquired Versace and brought two major Italian fashion houses together under one roof. The company paid $1.38bn, far below the roughly $2bn that Capri Holdings spent on Versace in 2018. The deal broadens Prada’s portfolio, which includes Miu Miu, and sharpens its competition with giants like LVMH, owner of Dior, Fendi and Louis Vuitton.
A New Direction for Versace
Donatella Versace stepped down in March after 27 years marked by glamour and the famous Medusa logo. She took over the brand in 1997 after the murder of her brother Gianni and shaped its image for decades. Dario Vitale replaced her and brought his background from Miu Miu, Prada’s youth-focused luxury label.
Sale Highlights Major Losses
The company is being sold at a loss of about $700m after Versace’s sales weakened. Capri Holdings also struggled with softer results from its other brands, including Michael Kors and Jimmy Choo. Under Capri’s ownership, Versace shifted from ornate designs to a minimalist approach while at the same time raising prices.
Prada Confirms the Takeover
Prada said in a short announcement that it completed the Versace acquisition after securing all necessary regulatory approvals. Capri Holdings stated it will use the proceeds to cut its debt significantly. Chief executive John D. Idol said the move will strengthen the firm’s financial outlook.
Prada Plans a Patient Turnaround
Prada chief executive Andrea Guerra said earlier this year that Versace carries huge potential. He added that the next phase will demand discipline, strategic focus and patience.
