Prada Acquires Versace for $1.38 Billion, Capri Refocuses Strategy on Michael Kors and Jimmy Choo
Key Highlights:
Prada agrees to buy Versace from Capri Holdings in a bold $1.38 billion cash transaction, a move that signals a strategic shift in the global luxury fashion arena. The announcement, made official this week, comes after months of speculation following a January 2025 report from Il Sole 24 Ore indicating Prada’s acquisition interest.
The deal is subject to regulatory approvals and customary closing conditions and is expected to be completed in the second half of 2025.
Capri’s Strategic Pivot After Versace Sale
Capri Holdings, which also owns Michael Kors and Jimmy Choo, originally acquired Versace in 2018 for $2.12 billion. Despite its initial promise, the brand has faced declining sales in recent quarters.
In Q3 FY25, Versace reported $193 million in revenue, reflecting a 15% year-over-year decline. Both retail and wholesale segments suffered mid-to-double-digit drops, prompting Capri to streamline its focus on more stable performers like Michael Kors.
Capri chairman and CEO John Idol remarked:
“This transaction reflects our commitment to increase shareholder value, strengthen our balance sheet and power the future growth of Michael Kors and Jimmy Choo.”
He emphasized that the deal allows Capri to reinvest in its core brands, reduce debt, and explore potential stock buybacks, aligning with the company’s broader capital allocation strategy.
Versace’s Next Chapter Under Prada
Founded in Milan in 1978, Versace has long been synonymous with bold luxury fashion. From high-end couture to a full range of apparel, accessories, fragrances, and home decor, the brand has built a global presence across flagship boutiques, online platforms, and department stores.
Prada Group, led by chairman Patrizio Bertelli, confirmed that Versace will maintain its creative independence while benefiting from Prada’s industrial strength, retail reach, and operational efficiency.
Bertelli stated:
“We aim to continue Versace’s legacy celebrating and re-interpreting its bold and timeless aesthetic. Our organisation is ready and well-positioned to write a new page in Versace’s history.”
Financial and Strategic Implications
- The $1.38 billion in cash will help Capri improve its balance sheet health and reinvest into high-performing brands.
- The sale is viewed as a long-term growth enhancer for Michael Kors, which remains Capri’s flagship brand.
- Analysts believe that Prada’s acquisition strengthens its position in the ultra-luxury fashion space, giving it a dual-market edge with both Prada and Versace under one banner.
The deal also reflects a trend of consolidation in luxury fashion, as top-tier houses seek to leverage scale, shared logistics, and unified brand strategy to weather global economic shifts.
What This Means for the Fashion Industry
The announcement that Prada agrees to buy Versace may trigger more acquisitions and brand re-alignments across the global luxury sector. With inflationary pressures, evolving consumer habits, and a pivot to digital-first retail, brands are focusing on core strength and strategic expansion.
Industry observers believe Prada’s move may inspire similar acquisitions from competitors like Kering, Richemont, and LVMH.
How Will Consumers Be Affected?
For luxury consumers, the deal could mean:
- Expanded collaborations between Prada and Versace
- Enhanced retail experiences through improved store formats and global integration
- Potential price stabilization and exclusive drops driven by Prada’s merchandising control
However, fashion purists will be closely watching to ensure Versace’s creative DNA isn’t diluted in the name of corporate synergy.
A Defining Deal in Luxury Fashion’s Future
As Prada agrees to buy Versace, the fashion world braces for another epoch-defining merger. For Prada, it’s an opportunity to cement its dominance. For Capri, it’s a chance to double down on core assets.
Whether this marks a renaissance for Versace or a reinvention under a new master brand remains to be seen. But one thing is clear—the luxury fashion landscape just shifted dramatically.
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