Luxury Fashion Shake-Up: Prada's Bold $1.36 Billion Move to Acquire Versace

In a historic move for the fashion industry, Prada has announced its acquisition of rival Versace for $1.36 billion (£1.06 billion). This strategic deal aims to merge two of Italy’s most prestigious designer labels, allowing them to form a formidable competitor against luxury giants like LVMH and Kering. Prada’s chairman, Patrizio Bertelli, expressed a commitment to uphold Versace’s legacy by celebrating its bold and timeless aesthetic.

The negotiation process began in February, and although the acquisition price is significantly lower than the $2.15 billion paid by Capri Holdings when they purchased Versace in 2018, circumstances have changed since then. Versace has been facing financial difficulties, reporting losses due to a slowdown in demand for luxury fashion globally. Including its debt in the deal, Prada aims to provide Versace with a robust platform from which to rebuild and thrive.

With the acquisition, Prada will enhance its portfolio, which already includes labels like Miu Miu and Church’s. According to Andrea Guerra, Prada’s CEO, the journey to realize Versace’s full potential will be challenging yet rewarding, emphasizing a need for discipline and patience in executing their vision.

As part of this transition, Donatella Versace has stepped down from her long-held role as creative director, a position she maintained since 1997, following her brother Gianni Versace’s tragic murder. Now, she will serve as chief brand ambassador, while Dario Vitale, formerly associated with Miu Miu, takes on the role of chief creative officer. This transition highlights a significant shift within Versace, as it integrates into the larger Prada Group, setting the stage for an invigorated brand identity.