(CTN News) – Prada announced on Thursday that it has reached an agreement to acquire Versace, a competing fashion brand based in Milan’s crosstown area, from American luxury firm Capri Holdings.

The sale of one of Italy’s most prestigious fashion labels is expected to fetch 1.25 billion euros ($1.4 billion).

Versace, known for its enticing shapes and striking Greco and Medusa symbols, will coexist with Prada’s “ugly chic” aesthetic and the youth-oriented Miu Miu, which has grown significantly in recent years, outpacing market trends. This transaction consolidates all of these brands into a single corporation.

Versace’s 47-year-old brand has “significant untapped potential.”

This is without a doubt our organization’s greatest strength. Lorenzo Bertelli, Prada’s Chief Marketing Officer, stated that there are no comparisons in terms of clientele or uniqueness.

His parents, Miuccia Prada, the corporation’s creative head and primary owner, and Patrizio Bertelli, its chairman and executive director, built the company into a global fashion powerhouse. He is now being groomed for the job of CEO.

Lorenzo Bertelli is being groomed to take over leadership of the organization.”We are acquiring a brand with considerable potential and a distinctly recognizable aesthetic,”

Lorenzo Bertelli said, noting that the Versace brand, which is ranked among the top ten globally, is known far beyond the company’s operational accomplishments.

The Prada Group acknowledges that the transaction’s final value will differ following completion, which is expected in the latter half of the year. The initiative has been supported with 1.5 billion euros in extra debt, which has been approved by Prada and Capri Holdings’ boards of directors.

Andrea Guerra, Prada’s CEO, explained that the acquisition was not intended to maximize synergies, but rather to create “sustainable revenue growth” and enrich the brand’s essence.

Versace, according to Prada, will capitalize on Prada’s “industrial capabilities, retail execution, and operational expertise” while keeping its cultural identity and artistic essence.

Versace’s CEO will remain, and Miuccia Prada will remain.

Furthermore, Guerra stated that the transaction had no impact on Versace’s recent creative restructure, which saw Dario Vitale, formerly the head of design for Miu Miu, succeed Donatella Versace as creative director on April 1.

Vitale called his decision “an autonomous and profoundly personal one.” Lorenzo Bertelli stated that Miu Miu’s development experience demonstrated that even minor changes can significantly impact the final result.

“Altering the brand is unjustifiable; instead, we should implement new innovations.” He went on: “We are expected to develop the situation, implement suitable measures, and collectively, we are hopeful that they will catalyze a substantial revival and restore Versace to its former prominence.”

In 2018, Versace was purchased by Capri Holdings for $2 billion. Nevertheless, the business struggled to transform Versace’s wild persona into a contemporary illustration of “quiet luxury.” Jimmy Choo and Michael Kors are also owned by a business known as Capri Holdings.

Versace’s revenue in 2024 was 20% of Capri Holdings’ overall revenue of 5.2 billion euros. Versace is expected to contribute 13% of the Prada Group’s pro-forma revenues, Miu Miu for 22%, and Prada for 64%, according to the presentation given to analysts about the Prada acquisition.

The Prada Group, which includes Church’s footwear, reported a 17% increase in revenue last year, totaling 5.4 billion euros.

Following her brother’s assassination in 1997,

Donatella Versace took over as creative director of the fashion brand he founded. She will continue to serve as the fashion company’s key brand ambassador.

In an Instagram post including a photo of herself with Miuccia Prada, she expressed her deep joy at being adopted by the Prada family. I value the brand greatly because it is owned by a prominent Italian family business. As a result, I am prepared to assist in any way I can.

The Italian government has approved an agreement that appears to safeguard Versace’s long-term viability, despite the death of other family-owned fashion companies who failed after partnering with foreign investors.

Adolfo Urso, Minister of Industry, announced that the ancient “Made in Italy” trademark had been returned to Italian hands.

SOURCE: AP