Introduction to the Prada Group’s Takeover of Versace
The fashion world is in turmoil as the Prada Group completes its €1.25bn (£1.10bn) takeover of Milan rival Versace, uniting the iconic brand’s "sexy silhouettes" with Prada’s signature "ugly chic" and Miu Miu’s youthful appeal under one roof. This strategic move is aimed at revitalizing Versace’s fortunes after a period of poor performance.
The Acquisition and Its Implications
In a short statement, Prada confirmed the completion of the highly anticipated transaction after receiving all necessary regulatory approvals. The acquisition marks a significant shift for Versace, which was previously part of US luxury group Capri Holdings, where it reportedly struggled to maintain its distinctive profile amid the growing trend towards "quiet luxury". Lorenzo Bertelli, heir to the Prada empire and currently the group’s marketing director and sustainability chief, will take the helm as CEO of Versace.
Future Plans and Expectations
Although he has indicated no immediate plans for sweeping senior management changes, Mr. Bertelli has openly admitted that the 47-year-old brand is underperforming despite its global prominence. Prada has stressed that Versace offers “significant untapped growth potential.” The brand is already enjoying a creative resurgence under new designer Dario Vitale, whose first collection debuted at Milan Fashion Week in September, a move that executives said came independently of the Prada deal.
Financial Aspects of the Acquisition
Capri Holdings, which also owns Michael Kors and Jimmy Choo, acquired Versace in 2018 for $2 billion. Versace contributed 20 percent of Capri Holdings’ 2024 sales of €5.2 billion (£4.5 billion). According to an analyst presentation, under the new structure, Versace will account for 13 percent of Prada Group’s pro forma sales, with Miu Miu accounting for 22 percent and flagship brand Prada accounting for 64 percent. The Prada Group, which includes Church’s shoes, saw sales rise 17 percent to 5.4 billion euros (£4.5 billion) last year.
Integration and Production
An important strategic element of the acquisition is the integration of Versace into the Prada Group’s prestigious Italian production system, something the conglomerate is very proud of. “When making a bag for one brand or another, the know-how is the same,” Mr. Bertelli told reporters last week, highlighting synergies at the Scandicci leather goods factory, which will soon produce for Versace alongside Prada and Miu Miu.
Investment in Supply Chain and Artisans
The Prada Group has committed 60 million euros (52 million pounds) to its supply chain this year, including new factories near Siena and Perugia, as well as the expansion of its Church shoe factory in the UK and another Tuscan facility. This builds on €200m (£175m) invested between 2019 and 2024. In addition, Prada’s in-house training academy has nurtured 570 new artisans in various Italian regions over 25 years and hired 70 percent of the 120 trainees last year, with the number of trainees increasing to 152 this year. This robust infrastructure underscores Prada’s long-term vision for its expanded portfolio.
