In a landmark move on Tuesday, Prada announced its acquisition of Versace, bringing two iconic Italian luxury fashion houses under one roof. The deal, valued at $1.38 billion (£1.04 billion), is significantly lower than the approximate $2 billion that Capri Holdings, Versace’s previous parent company, paid for the brand in 2018.
The acquisition expands Prada’s already impressive portfolio of designer brands, which includes Miu Miu, as the company strives to compete with major rivals like LVMH, which owns top-tier brands including Dior, Fendi, and Louis Vuitton.
The End of an Era for Donatella Versace
Notably, Donatella Versace, the brand’s long-time creative director, stepped down in March 2026 after a remarkable 27 years at the helm of the fashion company. Known for its glamorous and bold styles, Versace became synonymous with the Medusa head logo, a symbol of luxury and elegance.
Donatella took over leadership in 1997 following the tragic murder of her brother, Gianni Versace, who founded the brand. She was succeeded by Dario Vitale, a former design director at Miu Miu, Prada’s youthful luxury brand.
Financial Struggles and the Sale
Versace’s sale comes at a time when its sales have slowed, reflecting broader challenges at Capri Holdings, which also owns Michael Kors and Jimmy Choo. The sale of Versace is part of a broader effort by Capri Holdings to streamline its portfolio and address financial issues. The company is selling the brand at a $700 million loss.
Under Capri’s ownership, Versace shifted from its signature ornate designs to embrace a more minimalist style, all while increasing prices. This transformation, aimed at expanding the brand’s appeal, faced mixed reactions from consumers.
The Future of Versace Under Prada’s Ownership
Prada confirmed the acquisition was completed after securing all necessary regulatory approvals. In a statement, Prada expressed confidence in the potential of Versace, with Andrea Guerra, Prada’s CEO, stating earlier this year that the brand holds “huge potential.”
Prada’s decision to acquire Versace marks a bold step in the ongoing rivalry with LVMH. Both companies are now vying for dominance in the luxury fashion market, with Prada hoping to revive Versace’s iconic appeal.
For Capri Holdings, the sale will help reduce its debt load. CEO John D. Idol emphasized that the proceeds from the sale would go towards repaying the company’s debt, strengthening its balance sheet for future growth.
A Long Journey Ahead for Prada and Versace
While Prada is optimistic about Versace’s potential, Guerra acknowledged that the journey to restore the brand’s former glory would be a “long” one, requiring “disciplined execution and patience.” With both brands now under Prada’s umbrella, the fashion world will be watching closely to see how this high-profile acquisition unfolds.
