Prada acquires Versace in USD 1.4B deal
This move is expected to enhance the diversity and appeal of Prada’s brand portfolio.
ITALY – Prada, an Italian luxury fashion house, has acquired the iconic Versace for €1.25 billion (USD 1.38 billion) from Capri Holdings.
The acquisition is €180 million(USD 204.48 million) less than the initially projected amount of €1.43 billion(USD 1.62 billion).
The acquisition comes after months of speculation, market volatility, and initial doubts surrounding the deal.
Capri Holdings had previously acquired Versace in 2018 for USD 2.1 billion.
However, ongoing financial pressures prompted the global luxury group to divest the brand.
According to Prada, the transaction will be financed through €1.5 billion(USD 1.65 billion) in new debt, consisting of a €1.0 billion term loan and a €0.5 billion(USD 567.8 million) bridge facility.
Andrea Guerra, CEO of Prada, stated, “The acquisition of Versace marks another step in our group’s evolutionary journey, adding a new dimension, different and complementary.”
“The journey will be long and will require disciplined execution and patience.”
Leadership changes accompany the acquisition, with Dario Vitale, formerly of Prada’s sister brand Miu Miu, stepping in as Versace’s new creative director.
Donatella Versace, the creative force behind the brand for nearly three decades, will transition to the role of chief brand ambassador, focusing on celebrity styling and philanthropic initiatives.
Prada’s latest financial report for FY 2024 highlights strong growth and resilience in the luxury market.
The company achieved net revenues of €5.4 billion(USD 1.62 billion), reflecting a 17% year-on-year increase, driven by strong retail sales of €4.8 billion(USD 5.45 billion), which grew by 18%.
The net income rose by 25% to €839 million(USD 953.27 million).
Miu Miu, Prada’s sister brand, experienced an impressive 93% surge in revenue, marking a record year.
Prada also reported an EBIT margin of 23.6%, highlighting effective cost management and strategic investments.
This acquisition strengthens Prada’s portfolio and underscores its resilience in a cooling market.
Prada offers luxurious beauty products, including fragrances like Paradoxe and Candy, elegant makeup such as lipsticks and eye palettes, and advanced skincare items like face creams and serums.
Versace offers luxurious personal care products, including fragrances, aftershave lotions, body lotions, and shower gels.
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