Fashion house Prada bought the Versace brand

Prada is buying its smaller rival, fashion brand Versace, from Capri Holdings to merge two major Italian fashion houses. The deal is valued at $1.375 billion.

A number of media outlets, including CNN, are writing about this.

Prada wants to expand even as global demand for luxury goods weakens. Versace is in the red. The merger strengthens Italyʼs position in a fashion industry that is currently dominated by French companies.

“We aim to continue the legacy of Versace, celebrating and reimagining its bold and timeless aesthetic,” said Prada CEO Patrizio Bertelli.

The price Prada is paying is significantly lower than the one Capri paid in 2018, when Versace was worth more than $2 billion. Capri was formerly known as Michael Kors and acquired Versace from the Versace family and the Blackstone investment fund.

This agreement was concluded against the backdrop of a difficult situation in stock markets and fears of a global recession due to new tariffs imposed by the US President Donald Trump.

"Versace has enormous potential. The path will be long and will require disciplined execution and patience," said Prada CEO Andrea Guerra.

Prada had previously purchased Helmut Lang and Jil Sander in the 1990s, but the companyʼs CEO called those deals "strategic mistakes". The company had long avoided major acquisitions—until this deal.

• In early March, Donatella Versace stepped down as chief creative officer of the Versace fashion house after nearly 30 years at the helm. She took over the brand following the murder of its founder, her brother Gianni. Dario Vitale, who spent two years as the former design director of Italian brand Miu Miu, was appointed as the new chief designer.

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