Prada’s Versace Takeover: A Bold Move That Could Redefine Italian Luxury

• Prada acquires Versace from Capri Holdings for $1.375 billion.
• The transaction will be financed by $1.68 billion in new debt.
• Prada commits to preserving Versace’s creative legacy and heritage.

In what is being hailed as the most significant luxury fashion deal of 2025 so far, Capri Holdings—the parent company of Michael Kors, Versace, and Jimmy Choo—has agreed to sell Versace to the Prada Group for $1.375 billion.

According to Prada Group, the acquisition will be financed through $1.68 billion in new debt, comprising a $1.12 billion term loan and a $560 million bridge facility. The deal is expected to close in the latter half of the year.

This development follows the recently scrapped $8.5 billion merger between Tapestry and Capri Holdings. That deal was mutually terminated after the Federal Trade Commission (FTC) blocked it with a court injunction, citing anticompetitive concerns. The FTC argued the merger would have concentrated too much market power by combining brands like Coach, Kate Spade, Stuart Weitzman, Michael Kors, Jimmy Choo, and Versace under one corporate umbrella.

Now, Prada has stepped into the spotlight with a significant move that positions it as a growing powerhouse in the luxury fashion sector.

“This transaction reflects our commitment to increase shareholder value, strengthen our balance sheet and power the future growth of Michael Kors and Jimmy Choo,” said John Idol, Capri CEO and chair. “We are confident that Prada Group is the perfect company to further guide Versace into its next era of growth and success.”

Versace, established in 1978 in Milan, is renowned for its bold, glamorous designs. The brand came under the ownership of Capri Holdings (formerly Michael Kors Holdings) in 2018, following a $2.1 billion deal in which Donatella Versace and private equity firm Blackstone sold the company. Donatella, alongside her brother Santo, assumed leadership after the tragic 1997 murder of their brother and founder, Gianni Versace, in Miami Beach.

In a statement, Capri Holdings emphasized the strides made over the last six years to reinforce Versace’s position as a luxury fashion brand, focusing on heritage and craftsmanship. Capri stated that Versace is now well-prepared for sustained growth and that the divestment would help strengthen the company’s balance sheet, accelerate strategic investment in Michael Kors, and enhance shareholder returns.

Earlier this year, Capri reported a third-quarter revenue of $1.26 billion, an 11.6% drop year-over-year. On a constant currency basis, revenue fell by 11.4%. Retail sales saw a low double-digit decline, while wholesale revenues fell by low teens. Gross profit stood at $812 million with a margin of 64.4%, slightly down from $928 million and a 65.0% margin the year before. The company attributed the margin decrease to lower full-price sell-throughs.

Prada, in its official release, assured stakeholders that Versace’s creative identity would remain intact under its ownership.

“We are delighted to welcome Versace to the Prada Group and to build a new chapter for a brand with which we share a strong commitment to creativity, craftsmanship and heritage. We aim to continue Versace’s legacy by celebrating and re-interpreting its bold and timeless aesthetic; at the same time, we will provide it with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships,” said Prada chairman Patrizio Bertelli.

Prada CEO Andrea Guerra added: “The acquisition of Versace marks another step in the evolutionary journey of our Group, adding a new dimension, different and complementary. The Group’s infrastructure is strong, we have verticalized our brands’ organizations and reinforced our routines and processes. We feel ready to open this new chapter.”