Prada has officially announced its agreement to acquire its smaller competitor, Versace, in a significant deal valued at approximately $1.36 billion (£1.06 billion). This strategic move aims to unite two of the most recognized designer fashion labels in the industry, enhancing their market position and brand visibility.
The Prada Group, which is already home to several prestigious fashion brands, including Miu Miu and the luxury footwear label Church's, expressed its commitment to preserving Versace's legacy. "We aim to continue Versace's legacy celebrating and re-interpreting its bold and timeless aesthetic," stated Prada's chairman, Patrizio Bertelli.
This acquisition is set to establish a multi-billion dollar luxury fashion group that will enable the combined brands to effectively compete with leading French luxury fashion conglomerates such as LVMH and Kering. Negotiations between Prada and Capri Holdings for the purchase of Versace began back in February, highlighting the strategic planning behind this high-profile acquisition.
The purchase price of $1.36 billion is notably lower than the $2.15 billion that Capri Holdings initially paid for Versace in 2018. This deal, which also includes the brand's existing debt, comes at a time when Versace has been facing financial challenges, operating at a loss amidst a global slowdown in demand for luxury fashion.
It's worth noting that Capri Holdings, the parent company of Versace, also owns other well-known fashion brands such as Jimmy Choo and Michael Kors. The shift of ownership to Prada signifies a new chapter for Versace, with an emphasis on revitalizing the brand's potential in the competitive luxury market.
Bertelli emphasized that the Prada Group would offer Versace a robust platform to thrive. "Versace has huge potential," he remarked, indicating that the journey ahead will require "disciplined execution and patience," as noted by Andrea Guerra, Prada's Chief Executive Officer.
In a significant leadership transition, Donatella Versace stepped down from her role as creative director after nearly 30 years, a position she held since 1997 following the tragic murder of her brother, Gianni Versace. At 69, she will now serve as the Chief Brand Ambassador for Versace, while Dario Vitale, a former design and image director at Miu Miu, has been appointed as the new Chief Creative Officer.
This acquisition not only marks a pivotal moment for both Prada and Versace but also reshapes the landscape of the luxury fashion industry. As these two iconic brands come together, the potential for growth and innovation is immense, setting the stage for a dynamic future in high-end fashion.
