Italian luxury brand Prada may be considering acquiring Versace, according to a report from Il Sole 24 Ore.
The speculation comes as Versace’s owner, Capri Holdings Ltd., has enlisted Barclays to explore strategic options for the iconic label and other brands in its portfolio, including Jimmy Choo, to better focus on the relaunch of American ready-to-wear brand Michael Kors.
Prada has reportedly engaged Citi to assess whether pursuing Versace would align with its expansion plans.
This development follows a turbulent year for Capri Holdings.
A planned $8.5 billion merger with Tapestry, Inc. was halted by a court order, leaving Capri to refocus on its existing brands.
Versace’s decline in revenues and leadership clashes
Versace’s potential sale coincides with leadership upheaval.
Donatella Versace, the brand’s creative head and sister of founder Gianni Versace, has reportedly clashed with Capri CEO John D. Idol.
Her contract, set to expire next month, is rumoured not to be renewed.
Industry insiders speculate that Dario Vitale, formerly of Prada’s Miu Miu, could replace her.
Versace’s decline in revenues has added to the uncertainty. While the brand achieved $1.1 billion in revenue in 2023, global luxury demand has waned, particularly in China.
Between April and June of 2024, Versace’s revenue dropped 15.4%, resulting in an operating loss of $17 million.
Declining sales in Europe and the US further underscore the brand’s challenges.
Prada: A rare luxury sector winner
In contrast, Prada has been one of the few bright spots in the global luxury market, which has faced headwinds from inflation and a slowdown in key markets.
The family-owned company reported an 18% surge in third-quarter sales last year, driven largely by its Miu Miu brand, which has resonated strongly with younger consumers.
Prada’s interest in Versace could be part of its strategy to capitalize on its strong financial position and expand its footprint in the competitive luxury space.
However, Prada declined to comment on the speculation, and representatives for Citi and Capri Holdings were unavailable for immediate comment.
Versace: A storied legacy at stake
Founded in 1978 by Gianni Versace and his siblings Santo and Donatella, Versace quickly became a global fashion powerhouse.
Its bold designs and collaborations with artists like Andy Warhol redefined the luxury landscape, while Gianni’s close ties with supermodels cemented Versace as a cultural phenomenon in the 1980s and 1990s.
The brand’s reputation has endured despite challenges, but its recent struggles highlight the shifting dynamics of the luxury market.
Any acquisition by Prada could mark a significant turning point in Versace’s storied history, blending its legacy with Prada’s forward-looking strategy.
As Prada evaluates a potential deal and Capri explores its options, Versace’s future remains uncertain.
Whether Prada moves forward or another buyer emerges, the decision will likely influence the trajectory of both brands and could reshape the landscape of Italian high fashion.
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