What To Know About Prada’s “Looming” High-Stakes Acquisition of Versace
With the Prada Group seemingly set to acquire Versace, LUXUO explores what this bold move means for luxury fashion and why it is happening now amid economic uncertainty.
The luxury fashion industry may soon witness a monumental shift as the Prada Group positions itself to acquire Versace. As reported by Reuters, Capri Holdings — the parent company of Versace, Michael Kors, and Jimmy Choo — is considering the sale of its brands. Among the interested parties, the Prada Group — with Citi as its advisor — has reportedly shown significant interest in acquiring Versace. Such a move could further bolster the global standing of the “Made in Italy” legacy within the luxury sector.
Capri Holdings — a conglomerate that has faced well-documented financial struggles — had initially put the brand, along with Jimmy Choo, on the market in December 2024 following the collapse of a USD 8.5 billion proposed merger with Tapestry. As a brand, Versace is synonymous with opulence, extravagance, and a frisson of daring approach to design — embodying luxury as a status symbol. Prada on the other hand, is introspective and sophisticated — defining luxury as a statement of refinement and understated elegance. Both brands occupy distinct spaces in the fashion, appealing to vastly different sensibilities.
In 2023, when luxury American company Tapestry announced its intention to acquire Capri Holdings in a bid to compete with European luxury conglomerates, Tapestry CEO Joanne Crevoiserat stated, “The combination of Coach, Kate Spade, and Stuart Weitzman, along with Versace, Jimmy Choo, and Michael Kors, creates a powerful new global luxury house.” Capri Chairman and CEO John Idol responded, saying, “By joining forces with Tapestry, we will gain greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands”.
Could the Prada Group be keen on a similar direction?
What Prada Stands to Gain:
Versace’s distinctively bold aesthetic contrasts sharply with Prada’s reputation for understated elegance. This acquisition would allow Prada to tap into a different segment of the luxury market, appealing to consumers drawn to glamour and maximalism. Additionally, Versace’s strong presence in North America— a region where Prada has traditionally had a more subdued influence — presents immediate opportunities for growth and market penetration. According to Bain & Company, North America accounted for approximately 34 percent of global luxury sales in 2024. A potential acquisition could significantly strengthen Prada’s foothold in the market.
Next, few brands rival Versace when it comes to its association with Hollywood and pop culture symbols. One could argue this goes back to 1994 when the late Gianni Versace famously loaned the “Versace pin dress” to the then relatively unknown Elizabeth Hurley to the premiere of Four Weddings and a Funeral. The dress would go on to be considered one of the most recognisable fashion moments in history, significantly elevating Hurley’s public profile.
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One would be amiss not to mention Jennifer Lopez’s highly publicised Versace green jungle-print dress, worn to the 2000 Grammy Awards. The impact of this saw the daring look become so widely searched that Google realised the need for an image-specific search engine (thus the birth of Google Images) and reinforced Versace’s reputation for creating daring designs that celebrate sensuality and set a precedent for the brand’s strategy of making headlines with statement pieces on high-profile celebrities.
Most recently, Donatella Versace collaborated with singer Dua Lipa to unveil their co-designed women’s collection at Versace’s High Summer “La Vacanza” see-now-buy-now fashion show on the French Riviera in 2023. In recent years, Prada has also embraced celebrity muses, with Prada’s Autumn/Winter 2022 menswear collection featuring notable actors such as Thomas Brodie-Sangster, Louis Partridge, Kyle MacLachlan, and Jeff Goldblum.
Read More: Impact of Tapestry and Capri Monopoly on Mid-Luxury Consumers
Why Now?
When it comes to revenue, Jing Daily reports that Versace experienced a sharp decline, recording USD 201 million in revenue for the second quarter of the 2025 fiscal year ending 28 September — a 28.2 percent drop compared to the same period the previous year. In contrast, Jimmy Choo — another luxury brand under Capri Holdings — reported a revenue increase, reaching USD 140 million. This stark disparity highlights Versace’s challenges, making its financial struggles more pronounced within the Capri portfolio.
Prada posted double-digit growth, reaching EUR 3.829 billion in the first nine months of 2024. With prestigious brands such as Prada and Miu Miu, the Milan-based group could strengthen its portfolio with the addition of such an iconic house as Versace. Versace, meanwhile, is suffering a significant drop in sales, recording a 28.2 percent fall in the second quarter of 2024. This situation weakens Capri Holdings, already faced with the failure of a merger with the American group Tapestry, valued at approximately EUR 8.24 billion.
Why, in a time of economic uncertainty, would Prada consider acquiring Versace? The answer could lie in strategic economics — when markets are down, opportunities to invest at a lower cost often arise. Capri Holdings has struggled to maintain profitability, particularly with Versace. This precarious financial state presents a timely opportunity for Prada to negotiate favourable terms for the acquisition. The current economic environment — marked by lowered valuations across industries — further “sweetens” the deal.
Next, the luxury sector has seen increasing consolidation, with larger players acquiring smaller but renowned brands to consolidate market power. Prada’s move could be both defensive and strategic, ensuring it remains competitive against conglomerates like LVMH and Kering. This is where the significance of the aforementioned “Made in Italy” legacy comes in, to preserve and champion Italian craftsmanship and heritage against the French conglomerates giants of LVMH and Kering.
When it comes to potential pitfalls, maintaining Versace’s bold identity while aligning it with Prada’s values will require careful balancing. With global inflation and a potential downturn, luxury spending could contract, making this a risky time for significant capital investments. Reviving Versace’s profitability may necessitate operational restructuring, which could face resistance from existing stakeholders.
All That Glitters…
On the flipside, here is why the potential acquisition could be hearsay. Prada has historically been cautious about overextending itself through acquisitions, focusing instead on organic growth and nurturing its existing brands. As reported by Reuters in October 2024, Miu Miu exceeded Prada Group’s expectations, contributing one-quarter of the group’s total retail sales. Throughout the year, the Prada Group achieved strong, high-quality growth, reflected in positive revenue and margin gains. For the first nine months, revenues reached had reached approximately EUR 3.8 billion. Last year as the luxury fashion industry experienced various sales slumps, Prada saw revenues rise by 16 percent, the result of an increase in Miu Miu sales and continued growth in Asia with a boost in sales coming from China and Japan.
The company’s recent financial success — posting double-digit growth in 2024 — may indicate that it is well-positioned to act, but it also raises the question: why take on the risks of acquiring a struggling brand like Versace when Prada is thriving independently? Furthermore, no official confirmation or public statement has been made by either Capri Holdings or Prada, leaving room for speculation and industry gossip to amplify unverified rumours.
Interestingly, such rumours might work in Prada’s favour by keeping the brand in the spotlight and reinforcing its status as a serious contender in the luxury sector’s consolidation race. By being linked to a high-profile potential acquisition, Prada signals its ambition and financial strength to competitors and investors alike, even if no deal materialises. This strategic perception play ensures that Prada remains a focal point in discussions about the future of the luxury market.
Prada’s potential acquisition of Versace signals a bold ambition to reshape the luxury fashion landscape. While the timing may seem precarious, it could also be the perfect moment to seize an iconic brand at a strategic inflexion point. For Prada, this is more than a business transaction — it is a statement of intent to redefine luxury for a new era. The question remains: will Prada succeed in harmonising two distinct yet complementary legacies to create a powerhouse for the future? Only time will tell.
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