- Prada Group is looking to buy Versace from Capri Holdings for $1.6 billion USD (~$2.5 billion AUD).
- Deal would reverse trend of Italian fashion houses going into foreign hands.
- Prada’s strong financials, including 17% revenue growth to $5.8 billion USD, make the investment a smart move.
The acquisition dance between luxury fashion brands isn’t new — just ask LVMH, whose strategic genius has built a $300 billion USD empire through calculated purchases. Now, a new power play is taking place as the Prada Group wants to acquire Versace from Capri Holdings in a $1.6 billion USD (~$2.5 billion AUD) deal that could drop as soon as this month.
If it happens, the acquisition wouldn’t just expand Prada’s empire but also reverse a long-standing trend of Italian heritage brands slipping into foreign hands.
Prada’s Financial Strength Fuels Expansion
Prada isn’t going into this without a strong foundation. The fashion house ended 2024 with a 17% revenue increase and hit $5.8 billion USD, which was increased by Miu Miu’s 93% sales growth. With numbers like that, the brand is confident and in a prime position to make investment moves.
On the flip side, Versace’s journey under Capri Holdings has been less glamorous. Despite Capri’s 2018 acquisition of the brand for $2.1 billion USD, Versace has struggled due to a 15% revenue drop in the final quarter of 2024, making the brand land at $193 million USD. Capri optimistically projects Versace’s revenue potential to be at $900 million USD by 2028, with dreams of hitting $1.5 billion USD long term. However, current market conditions make those goals look like a stretch.
Strategic Implications & Market Response
The acquisition could help Prada tap into Versace’s high-glam market, which in turn will improve Prada’s competitive position against luxury giants like LVMH and Kering. More importantly, it keeps an Italian Brand in Italian hands — something that hasn’t always been the case.
However, this isn’t going to be a walk in the park. Dropping $1.6 billion USD on Versace is just the opening move. The real challenge will be bringing the brand back to its full potential. That means fresh creative direction and better marketing.
Regardless, investors still like the idea. Prada’s stock increased by 3.5% on the Hong Kong Exchange after news of the potential deal was revealed. The market clearly sees the benefit because Prada’s disciplined leadership combined with Versace’s strong brand identity could be a winning formula.
