Prada Nearing Deal to Acquire Versace in a Major Italian Luxury Merger

Italian luxury fashion house Prada is reportedly close to finalizing a deal to acquire Versace from Capri Holdings for up to €1.5 billion ($1.6 billion).

The acquisition would bring together two of Italy’s most well-known luxury brands, potentially strengthening Prada’s position in the global fashion industry.

The discussions between Prada and Capri Holdings have been ongoing for months, with initial negotiations being prolonged due to Capri’s higher asking price of €3 billion and interest from other potential buyers. However, sources close to the talks indicate that an agreement could be finalized within weeks.

If the deal goes through, it would mark a significant shift in the Italian fashion landscape, consolidating the industry and creating a stronger competitor against global luxury giants like LVMH and Kering. The move would also counter a long-standing trend of Italian luxury brands being acquired by foreign companies, such as Gucci and Valentino.

Following news of the potential deal, Capri Holdings’ stock jumped by as much as 9.6% before regular trading in New York on Monday, while Prada’s shares rose 4.1% in Hong Kong.

Capri Holdings, which also owns Michael Kors and Jimmy Choo, has faced challenges in reviving sales growth. Its previous attempt to merge with Tapestry Inc., the parent company of Coach, fell apart in 2023 after facing antitrust opposition from US regulators. With Capri’s financial struggles, the sale of Versace could provide a much-needed strategic shift for the company.

Meanwhile, Prada has been one of the luxury industry’s stronger performers, thanks in part to the success of its Miu Miu brand, which has gained popularity among younger consumers. Analysts suggest that acquiring Versace would expand Prada’s market reach, especially given the contrasting aesthetics of both brands—Prada’s minimalist elegance versus Versace’s bold, extravagant style.

Capri Holdings originally acquired Versace in 2018 for approximately €1.85 billion, including debt. The brand, founded in 1978 by the late Gianni Versace, remains a symbol of high fashion and luxury, known for its flashy designs and signature Medusa logo.

Industry experts believe that Prada could be well-positioned to unlock Versace’s full potential while maintaining its unique brand identity. UBS analysts have suggested that this acquisition could pave the way for Prada to become Italy’s answer to France’s luxury conglomerates.

With input from the Financial Times and Bloomberg.