Highlights
- Prada acquires Versace for $1.51 bn, significantly less than $2 bn paid by Capri Holdings in 2018.
- Lorenzo Bertelli to become executive chairman of Versace following integration.
- Donatella Versace stepped down as creative chief in March after 27 years.
The deal, announced on Tuesday, marks a substantial discount from the roughly $2 bn that Versace's former parent company, Capri Holdings, paid for the brand in 2018. The sale represents approximately a $700 m loss for Capri Holdings, which also owns Michael Kors and Jimmy Choo.
The acquisition expands Prada's portfolio of designer brands, including youth-focused luxury label Miu Miu, as it seeks to compete with French conglomerate LVMH, which owns Louis Vuitton, Dior and Fendi.
Lorenzo Bertelli, son of Prada owners Miuccia Prada and Patrizio Bertelli, told Reuters in November that he will become executive chairman of Versace once the integration is complete. He revealed that Prada had been pursuing the deal for several years.
"There had already been contacts during the COVID period, there were talks even before Capri's sale to Tapestry. When that deal fell through over antitrust issues, we came back and tried to speed things up," Lorenzo Bertelli told Reuters.
He pointed that Versace met two key conditions: that it was not too risky financially and that it was worthwhile, given the brand ranks among the world's leaders in terms of awareness.
In March, weeks before the deal was announced, Donatella Versace stepped down as creative chief after almost three decades. She took over the company in 1997 following the murder of her brother Gianni. Dario Vitale, formerly design director at Miu Miu, replaced her.
Capri Holdings chief executive John D Idol told BBC that the proceeds from the sale will repay the majority of the company's debt, substantially strengthening its balance sheet.
