MILAN, Italy โ The house that once draped supermodels in gold Medusa chains and hypnotic baroque swirls has finally returned to Italian hands. Prada, the family-run Milanese fashion empire, has just bought Versace for a tidy $1.375 billion in cash. Capri Holdings, the American parent company of Michael Kors and Jimmy Choo, waved the deal through in hopes of saving its balance sheet.
After a messy six-year run under Capri, Versace will now sit beside Prada, Miu Miu, Churchโs, and even a fancy Italian pastry brand under the Prada Group umbrella. It is a marriage between two fashion titans with very different DNAโone sleek and cerebral, the other loud and unapologetically opulent.
Why Versace Was Sold: The Real Drivers Behind the $1.4 Billion Deal
Capri Holdings paid $2.15 billion to grab Versace in 2018. Fast forward to 2025, and it is selling it at a 36% markdown. That is one way to admit things did not go to plan.
- Versace operated at a loss under Capri
- Global equity markets are shaky thanks to Trump’s chaotic new tariffs
- Donatella Versace recently stepped down as creative director
- Prada has outperformed despite luxuryโs overall slowdown
Capriโs dream of creating an โAmerican LVMHโ collapsed under its own ambitions. Michael Kors could not hold the same cultural weight as Dior.
Jimmy Choo sells shoes, not empires. And Versace, flashy as ever, never really settled into its new house.
Capri CEO John Idol, ever the optimist, insists the sale frees up cash to invest in Michael Kors and Jimmy Choo. Sounds good on paper. In reality, it looks like they panicked, pulled the plug, and ran.
What Prada Gets: More Than Sequins and Safety Pins
The Prada Group gains more than a logo with gold accents. Versace brings a distinct identity, a fanatical global audience, and access to markets Prada usually avoids.
- Versaceโs maximalist designs target a younger, more flamboyant crowd
- Adds diversification without creative overlap with Prada or Miu Miu
- Expands groupโs critical mass to rival French giants like LVMH or Kering
Pradaโs CEO Andrea Guerra called the acquisition โa new dimension.โ Translation: they finally get to play with the wild child of Italian fashion without diluting the intellectual cool of their main brand.
And letโs not forgetโVersace now joins the same portfolio that includes Marchesi, a pastry label. Because nothing says synergy like pairing luxury leather goods with cream-filled cannoli.
Donatellaโs Exit and What Comes Next
Donatella Versace stepped down as creative director in March. Her exit created a vacuum, and Prada wasted no time swooping in. No word yet on who will take over design duties, but safe bet it will be someone with an eye for drama.
There is no Versace without some theatrical flair, and Prada knows better than to flatten it with minimalism. Expect Versace to stay loudโjust with a better accountant.
Capriโs Strategy: Make It Look Like a Win
John Idol spun the sale as a strategic win. He claimed it will:
- Strengthen Capriโs balance sheet
- Support investments in Michael Kors
- Allow for future stock buybacks
- Refocus on โcapital allocation prioritiesโ (whatever that means today)
Sounds like a lot of buzzwords hiding a deep sigh of relief. Capri tried to act like a French fashion giant. It ended up overpaying for one of Italyโs biggest names, fumbling the bag, and selling it back at a discount.
Italy Reclaims a Fashion Crown
The sale is more than a business move. It marks the return of one of Italyโs most recognizable fashion brands to domestic ownership.
- Prada and Versace now form Italyโs strongest luxury alliance
- Strengthens national presence in a luxury space dominated by France
- Sends a clear message: Italy is not finished yet
The deal is also a nod to heritage, craft, and national pride. It turns out “Made in Italy” still mattersโand can still cash a $1.4 billion check.
Final Stitch
Prada now carries the pressure of turning Versaceโs chaotic energy into long-term growth. No small task. The runway will be long, as CEO Andrea Guerra pointed out. But Prada is betting it can stitch order into the house Gianni built and Donatella redefined.
And Capri? Back to Kors and Choo and a few too many Investor Day presentations. Good luck with that.
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