Prada has bought Versace for $1.4 billion. Can it make its Milan rival ‘interesting again’?

The Prada Group closed the purchase of Milan fashion rival Versace in a US$1.4 billion deal that puts the fashion house known for its sexy silhouettes under the same roof as Prada’s “ugly chic” aesthetic and Miu Miu’s youth-driven appeal.\nThe highly anticipated deal is expected to relaunch Versace’s fortunes following a middling post-pandemic performance as part of the American luxury group Capri.\nPrada said in a one-line statement that the acquisition had been completed after receiving all regulatory clearances. Capri, which owns Michael Kors and Jimmy Choo, said the money would be used to pay down debt.\nDonatella Versace welcomed the deal in an Instagram post, which also marked the birthday of the brand’s late founder, her brother, Gianni Versace.\n“Today is your day and the day Versace joins the Prada family,” she wrote in a post that also featured a 1996 photo of Gianni Versace with Miuccia Prada. “I am thinking of the smile you would have had on your face.”\n\nPrada heir Lorenzo Bertelli is set to steer Versace’s next phase as executive chairman, in addition to his roles as group marketing director and sustainability chief.\nThe son of co-creative director Miuccia Prada and long-time Prada Group chairman Patrizio Bertelli has said he does not expect to make any swift executive changes at Versace. He also noted that the company, which is among the top 10 most recognised brands in the world, has long been underperforming in the market.\nPrada has underlined that the 47-year-old Versace brand offered “significant untapped growth potential”.\nThe appeal of the deal is that it combines “the minimalist Prada [with] a maximalist Versace”, said Luca Solca, managing director for the luxury sector at the Sanford C. Bernstein research firm, meaning that the brands do not compete for the same customers.\nVersace is “long past its heyday”, Solca said.\n“The challenge and the opportunity is to make it relevant again. They are going to have to invent something which is going to make the brand attractive, desirable and interesting again.”\n\nVersace has already begun a creative relaunch under a new designer, Dario Vitale, who previewed his first collection during Milan Fashion Week in September. He was previously head of design at Miu Miu, but his move to Versace was unrelated to the Prada deal, executives have said.\nThe runway show received mixed reviews, but the collection itself – a colourful, revealing riff on the 1980s – got good feedback from buyers.\n“I think that this seems to be a promising first step,” Solca said.\nCapri paid US$2 billion for Versace in 2018, but had been struggling to position the brand’s bold profile in the recent era of “quiet luxury”.\nCapri chairman John D. Idol said in a statement that “Prada is the ideal partner to guide this celebrated luxury house into its next era of growth”.\nThe Prada Group has already begun preparations to incorporate crosstown rival Versace into its Italian manufacturing system, a point of pride for the group.\n“Making a bag for one brand or another, the know-how is the same,” Bertelli told reporters last week at the group’s Scandicci leather goods factory, which already makes bags for the Prada and Miu Miu brands and will soon add Versace.\n\nArtisans stitched handles onto leather bags and cut leather with laser machines inside the leather goods factory, where trainees were learning the trade as part of Prada’s 25-year-old academy.\nIt has trained some 570 new artisans in an in-house training programme in the Tuscany, Marche, Veneto and Umbria regions.\nIn 2024, Prada hired 70 per cent of the 120 artisans who trained in the academy. The number of trainees rose by 28 per cent to 152 this year.\nThe Prada Group has invested €60 million (US$70 million) in its supply chain this year, including a new leather goods factory near Siena, a new knitwear factory near Perugia, as well as increasing production at its Church’s footwear factory in Britain and expanding another Tuscan factory. That is on top of €200 million in investments from 2019 to 2024.\n