LUXURY SHAKE-UP!! Prada Nears $1.6 Billion Deal for Versace
The move, reported by Bloomberg News on Sunday, could reshape the high-stakes world of luxury fashion, pitting Prada against industry titans like LVMH and Kering.
Italian luxury giant Prada is closing in on a transformative acquisition of Versace, a deal pegged at nearly €1.5 billion ($1.6 billion USD), as its parent company, Capri Holdings, seeks to offload the struggling brand. The move, reported by Bloomberg News on Sunday, could reshape the high-stakes world of luxury fashion, pitting Prada against industry titans like LVMH and Kering.
Prada secured exclusive access to Versace’s financial data on February 20, with a four-week window to assess the brand, a source close to the matter told Reuters. That window closed just days ago, and talks have progressed smoothly, with initial due diligence revealing no major risks, per Bloomberg’s sources. A deal could be finalized this month, though timing and value remain fluid, and negotiations could still falter. Prada declined to comment, while Capri Holdings did not respond outside business hours.
Capri, which also owns Michael Kors and Jimmy Choo, bought Versace in 2018 for €1.83 billion amid ambitions to build a global luxury powerhouse. But the Medusa-logo brand has stumbled, reporting a 15% revenue drop to $193 million in the third quarter ending December 28, 2024, with operating losses widening to $21 million. Capri forecasts Versace’s 2025 revenues at $810 million, barely breaking even by 2026—a stark contrast to Prada’s 18% sales surge last year, driven by its Miu Miu label.
The potential sale follows Capri’s failed $8.5 billion merger with Tapestry in November 2024, blocked by a U.S. court. With Barclays advising, Capri pivoted to explore unloading Versace and Jimmy Choo. Prada, working with Citi, emerged as a frontrunner, granted early access over rivals like Italy’s Only The Brave, whose founder Renzo Rosso also expressed interest. “Versace is on everyone’s table,” Miuccia Prada quipped last week, nodding to the bidding buzz.
For Prada, snagging Versace—known for its bold, maximalist aesthetic—marks a departure from its minimalist roots and a rare acquisition since the 1990s. Analysts see potential in targeting Versace’s distinct clientele but warn of a “challenging turnaround.” Bernstein’s Luca Solca values Versace at $1.75 billion to $2.19 billion, excluding debt, though its recent slump could complicate pricing.
As luxury consolidates amid a sector slowdown—hit by waning Chinese spending—Prada’s move could bolster Italy’s fashion legacy against French conglomerates. Yet, with Versace’s revival uncertain and no deal sealed, the fashion world watches: Will this be a masterstroke or a costly gamble?
