The Prada Group has officially acquired its Milanese fashion competitor, Versace, in a monumental €1.25 billion ($2.2 billion) transaction. This strategic move brings the iconic Versace, famed for its alluring designs, under the same umbrella as Prada’s distinct “ugly chic” style and Miu Miu’s youthful vibrance.

This eagerly awaited acquisition is poised to rejuvenate Versace’s prospects, following its less-than-stellar performance in the post-pandemic era as part of the US-based luxury conglomerate, Capri Holdings.

Prada confirmed in a succinct statement that all necessary regulatory approvals have been secured, finalizing the acquisition process.

Lorenzo Bertelli, heir to the Prada legacy, will guide Versace into its next chapter as executive chairman. He will continue to hold his current positions as Prada Group’s marketing director and sustainability leader.

As the son of Miuccia Prada, co-creative director, and Patrizio Bertelli, the long-standing chairman of the Prada Group, Lorenzo Bertelli has indicated that he does not foresee immediate executive shake-ups at Versace. However, he has acknowledged that the brand, despite being one of the top 10 most recognized globally, has consistently underperformed in the market. Bertelli’s leadership aims to address this gap and harness Versace’s full potential.

Prada has underlined that the 47-year-old Versace brand offered “significant untapped growth potential”.

Versace has been in the midst of a creative relaunch under a new designer, Dario Vitale, who previewed his first collection during Milan Fashion Week in September. He had previously been head of design at Miu Miu, but his move to Versace was unrelated to the Prada deal, executives have said.

Capri Holdings, which owns Michael Kors and Jimmy Choo, paid $2 billion ($3.05 billion) for Versace in 2018, but had been struggling to position Versace’s bold profile in the recent era of “quiet luxury”.

Versace represented 20 per cent of Capri Holdings 2024 revenue of €5.2 billion. An analyst presentation for the Prada deal said that Versace would represent 13 per cent of the Prada Group’s pro-forma revenues, with Miu Miu coming in at 22 per cent and Prada at 64 per cent. The Prada Group, which also includes Church’s footwear, reported a 17 per cent boost in revenues to €5.4 billion last year.

Prada’s in-house manufacturing

The Prada Group has already begun preparations to incorporate crosstown rival Versace into its Italian manufacturing system, a point of pride for the group.

“Making a bag for one brand or another, the know-how is the same,″ Bertelli told reporters last week at the group’s Scandicci leather goods factory, which already makes bags for the Prada and Miu Miu brands and will soon add Versace.

The Prada Group’s has invested €60 million in its supply chain this year, including a new leather goods factory near Siena, a new knitwear factory near Perugia as well as increasing production at its factory Church’s footwear factory in Britain and expanding another Tuscan factory. That’s on top of €200 million in investments from 2019-24.

Prada’s efforts include an academy that has trained some 570 new artisans more than 25 years in an in-house training academy operating in the Tuscany, Marche, Veneto and Umbria regions.

Last year, Prada hired 70 per cent of the 120 artisans who trained in the academy. The number of trainees rose by 28 per cent to 152 this year.