Today, the exact date that it was said it would happen, Versace officially becomes part of the Prada Group. This union is surprising yet strategic and means a lot in the context of the Italian luxury panorama.
A new chapter in italian fashion
The acquisition marks a turning point for the fashion industry. By adding Versace to its portfolio, the Prada Group is looking to challenge direct competitors, LVMH. The French-based conglomerate has been dominating the global scene for some time.
Versace has been under the influence of Capri Holdings since 2018. Many wondered if back in the day, the switch would mean the Versace identity would be toned down. Now, this move underlines the brand’s commitment to Italian heritage, craftsmanship and creative autonomy, with Dario Vitale as creative director.
Uniting both Prada and Versace under the same umbrella sends out a signal that the recent popularity growth of the made in Italy label is here to stay. With Prada placed in 8th place and Versace in 9th in a report regarding the most popular brands of 2024, the partnership solidifies the brand awareness of both.
Io, Miuccia e Donatella
Unfortunately, we won’t see the two powerhouses that are Miuccia Prada and Donatella Versace working together. Donatella has stepped down from guiding Versace almost exactly one month ago. In her steps we’ll see Dario Vitale take the creative lead of the brand.
Prada has previously mentored Vitale during his stay at Miu Miu. We will see if his magic touch will be enough to revitalise Versace the way he did Miu Miu. The Prada Group’s influence can be contained though. We have previously noted in maisons such as Church’s and Car Shoe that have kept their signature under the Italian ownership.
The numbers
Due to the tariffs, Prada gets a 200 million dollar discount on the acquisition, bringing down the purchase price to $1.38 billion. Capri Holdings was initially asking for a 3 billion euro affair, after acquiring the brand for €1.38 billion. Therefore, they are making no money on the sale.
This sale sets the precedent for any fashion merger and acquisition deals in the current market cycle. At this price, Prada Group is acquiring Versace at 1.7 times the revenue it is estimated to make in this fiscal year, which is around 810 million dollars.
A comparable transaction would be when Advent International acquired Zimmermann at 4.4 times the revenue, just a year and a half ago. Fashion brands looking for a liquidity event in this current market will either need to accept significantly lower exits or “wait it out” and hope fashion dealmaking comes back in their favor.
Even though the Prada Group has a revival of Versace in mind, the looming tariffs and increasing consumer spending on experiences versus things might predict cloudy days ahead. This comes especially from the fact that Versace has a great deal of exposure to the Asian market and American one as well.
From a fashion lover’s point of view, this merger isn’t just business, it is a cultural moment. A chance to reimagine the made in Italy luxury sector beyond 2025. This partnership has to occasion to redefine the industry’s future.
Featured image: Instagram.
