The Prada Group announced a deal on Thursday, to buy fashion rival Versace from the U.S. luxury group Capri Holdings in a deal valued at 1.25 billion euros or $1.4 billion. This deal would put Versace under the same roof as Prada, and the youth-driven Miu Miu, in spite of the stark differences in their styles. Prada said the 47-year-old Versace brand offered “significant untapped growth potential.”
“This is exactly the strength for our group. There are no overlaps in terms of creativity, in terms of customer,” said Lorenzo Bertelli, Prada’s chief marketing officer, who is also the son of Miuccia Prada — the Group’s creative force and largest shareholder — and Patrizio Bertelli — Prada’s chairman and executive director.
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“We are buying a brand with huge potential, with a very recognizable aesthetic,” he added. The final value of the deal will be adjusted at closing, which is expected in the second half of the year, the Prada Group said. It will be funded by 1.5 billion euros in new debt and has been approved by the Prada and Capri Holdings board of directors.
This deal comes in spite of concerns over U.S. tariffs and market volatility. A source told Reuters that Capri needed to divest Versace to focus on turning around its Michael Kors fashion brand, while for Prada, the bet on Versace comes at a time when it is looking to revive growth as its existing stable of brands start to mature. The acquisition is a long-term project for Prada and is aimed mainly at expanding revenues rather than cost-savings, Prada Chief Executive Andrea Guerra told analysts in a conference call.
This announcement comes shortly after Donatella Versace announced she was stepping down as the chief creative officer of the brand founded by her late brother Gianni in 1978.