The Prada Group has officially taken over its Milanese competitor, Versace, in a significant deal valued at €1.25 billion ($2.2 billion). This acquisition brings the fashion house noted for its daring designs under the same umbrella as Prada’s “ugly chic” style and Miu Miu’s youthful allure.

This eagerly awaited transaction is poised to rejuvenate Versace’s prospects following a lackluster performance post-pandemic while it was part of the US-based luxury entity, Capri Holdings.

Prada confirmed in a brief statement that the acquisition had been finalized after obtaining all necessary regulatory approvals.

Lorenzo Bertelli, the Prada heir, will lead Versace into its next chapter as the executive chairman, alongside his existing roles as group marketing director and chief of sustainability.

Bertelli, son of co-creative director Miuccia Prada and longtime chairman Patrizio Bertelli, has indicated that he does not plan to implement immediate management changes at Versace. However, he acknowledges that Versace, ranked among the top 10 most recognized brands globally, has not been reaching its full market potential.

Prada has emphasized that the nearly half-century-old Versace brand holds “significant untapped growth potential.”

Versace has been in the midst of a creative relaunch under a new designer, Dario Vitale, who previewed his first collection during Milan Fashion Week in September. He had previously been head of design at Miu Miu, but his move to Versace was unrelated to the Prada deal, executives have said.

Capri Holdings, which owns Michael Kors and Jimmy Choo, paid $2 billion ($3.05 billion) for Versace in 2018, but had been struggling to position Versace’s bold profile in the recent era of “quiet luxury”.

Versace represented 20 per cent of Capri Holdings 2024 revenue of €5.2 billion. An analyst presentation for the Prada deal said that Versace would represent 13 per cent of the Prada Group’s pro-forma revenues, with Miu Miu coming in at 22 per cent and Prada at 64 per cent. The Prada Group, which also includes Church’s footwear, reported a 17 per cent boost in revenues to €5.4 billion last year.

Prada’s in-house manufacturing

The Prada Group has already begun preparations to incorporate crosstown rival Versace into its Italian manufacturing system, a point of pride for the group.

“Making a bag for one brand or another, the know-how is the same,″ Bertelli told reporters last week at the group’s Scandicci leather goods factory, which already makes bags for the Prada and Miu Miu brands and will soon add Versace.

The Prada Group’s has invested €60 million in its supply chain this year, including a new leather goods factory near Siena, a new knitwear factory near Perugia as well as increasing production at its factory Church’s footwear factory in Britain and expanding another Tuscan factory. That’s on top of €200 million in investments from 2019-24.

Prada’s efforts include an academy that has trained some 570 new artisans more than 25 years in an in-house training academy operating in the Tuscany, Marche, Veneto and Umbria regions.

Last year, Prada hired 70 per cent of the 120 artisans who trained in the academy. The number of trainees rose by 28 per cent to 152 this year.