Negotiations between Prada and Capri Holdings for the Milanese luxury group’s acquisition of Versace could be concluded in a matter of weeks. According to rumours reported in the last few days by Italian business daily Il Sole 24 Ore, an April 10 deadline has been set for the negotiations that see Prada in pole position for buying Versace, in a deal worth approximately €1.5 billion. The deal might be worth up to €2 billion if it were to include luxury footwear brand Jimmy Choo. The goal of the operation is to relaunch the eponymous label founded by Gianni Versace, which was sold in 2018 by private equity firm Blackstone and the Versace family to Capri Holdings for approximately €1.85 billion. 

Through the acquisition, the Prada group would diversify and strengthen its market position, while creating an Italian luxury conglomerate capable of competing internationally, especially against the duopoly formed by French giants LVMH and Kering. The Milanese fashion group is listed on the Hong Kong stock exchange, and currently has a market capitalisation of HK$140.15 billion (approximately €16.7 billion). Its brand portfolio includes Prada, Miu Miu, Church’s, Car Shoe, Marchesi 1824, and Luna Rossa. Buying Versace (and possibly Jimmy Choo) would add considerable heft to the Prada group, which now seems stronger than ever, having recorded net revenue of €5.4 billion in 2024, a 17% increase over 2023, well above the market average. 

The Prada label’s retail revenue grew by 4%, and Miu Miu’s by 93%. The results were all the more significant in terms of the group’s regional performance, especially in Asia, where competitors struggled while the Prada group reported double-digit growth in net retail sales in Japan (up by 45.8%), the Middle East (up 26%), Europe (up 17.5%), and Asia-Pacific as a whole (up 13.1%). Versace instead recorded a 15% revenue drop between October and December 2024, down to $193 million, also posting an operating loss of $21 million. Figures that have led some analysts to question the wisdom of the ‘Pradace’ deal, as the Prada-Versace marriage has been dubbed by some. Italian investment bank Equita said that “Prada would have the resources to support Versace’s relaunch, but it could be a potentially lengthy, difficult process.” Equita’s analysts added they would not “welcome the news” but “at the same time, given the potential valuation figures currently circulating, we are envisaging a limited negative impact in terms of value creation.”

It is a fact that, from April 1, a member of the Versace family will no longer be in charge of the label’s creativity, since Donatella will make way for Dario Vitale, former design and image director at Miu Miu. For several days, Vitale’s appointment has fuelled rumours that the group spearheaded by Miuccia Prada and Patrizio Bertelli is close to clinching the Versace deal with Capri Holdings. Donatella Versace will not however completely sever her ties with the label she has led since 1997, the year of her brother Gianni’s death. She will become Versace’s chief ambassador and “will continue to support the brand and its values,” according to John D. Idol, president and CEO of Capri Holdings. 

In the press release announcing a spate of new appointments at Versace, Idol stated that a “a carefully thought-out succession plan” is under way at the label. Capri Holdings has been trying to sell Versace for a long time, and the plan became more urgent last October, when a US judge blocked Capri’s $8.5 billion merger with Tapestry, owner among others of Coach and Kate Spade. If Prada were to succeed in acquiring Versace, the deal would surely signal a decisive change of pace in the Italian fashion industry, after major foreign groups have been shopping for luxury labels in Italy for decades, buying the likes of Fendi, Gucci and Valentino.