The posh trend trade could quickly witness a monumental shift because the Prada Group positions itself to accumulate Versace. As reported by Reuters, Capri Holdings — the guardian firm of Versace, Michael Kors, and Jimmy Choo — is contemplating the sale of its manufacturers. Among the many events, the Prada Group — with Citi as its advisor — has reportedly proven important curiosity in buying Versace. Such a transfer might additional bolster the worldwide standing of the “Made in Italy” legacy throughout the luxurious sector.
Capri Holdings — a conglomerate that has confronted well-documented monetary struggles — had initially put the model, together with Jimmy Choo, in the marketplace in December 2024 following the collapse of a USD 8.5 billion proposed merger with Tapestry. As a model, Versace is synonymous with opulence, extravagance, and a frisson of daring strategy to design — embodying luxurious as a standing image. Prada then again, is introspective and complicated — defining luxurious as an announcement of refinement and understated class. Each manufacturers occupy distinct areas within the trend, interesting to vastly completely different sensibilities.
In 2023, when luxurious American firm Tapestry introduced its intention to accumulate Capri Holdings in a bid to compete with European luxurious conglomerates, Tapestry CEO Joanne Crevoiserat said, “The mix of Coach, Kate Spade, and Stuart Weitzman, together with Versace, Jimmy Choo, and Michael Kors, creates a strong new international luxurious home.” Capri Chairman and CEO John Idol responded, saying, “By becoming a member of forces with Tapestry, we’ll achieve better sources and capabilities to speed up the growth of our international attain whereas preserving the distinctive DNA of our manufacturers”.
Might the Prada Group be eager on an analogous course?
What Prada Stands to Achieve:
Versace’s distinctively daring aesthetic contrasts sharply with Prada’s fame for understated class. This acquisition would permit Prada to faucet into a unique phase of the posh market, interesting to customers drawn to glamour and maximalism. Moreover, Versace’s sturdy presence in North America— a area the place Prada has historically had a extra subdued affect — presents rapid alternatives for development and market penetration. In line with Bain & Firm, North America accounted for roughly 34 p.c of worldwide luxurious gross sales in 2024. A possible acquisition might considerably strengthen Prada’s foothold available in the market.
Subsequent, few manufacturers rival Versace in the case of its affiliation with Hollywood and popular culture symbols. One might argue this goes again to 1994 when the late Gianni Versace famously loaned the “Versace pin gown” to the then comparatively unknown Elizabeth Hurley to the premiere of 4 Weddings and a Funeral. The gown would go on to be thought-about probably the most recognisable trend moments in historical past, considerably elevating Hurley’s public profile.
Learn Extra: The Energy and Relevance of Luxurious Trend Conglomerates
One could be amiss to not point out Jennifer Lopez’s extremely publicised Versace inexperienced jungle-print gown, worn to the 2000 Grammy Awards. The affect of this noticed the daring look turn out to be so extensively searched that Google realised the necessity for an image-specific search engine (thus the start of Google Photos) and bolstered Versace’s fame for creating daring designs that commemorate sensuality and set a precedent for the model’s technique of constructing headlines with assertion items on high-profile celebrities.
Most not too long ago, Donatella Versace collaborated with singer Dua Lipa to unveil their co-designed girls’s assortment at Versace’s Excessive Summer season “La Vacanza” see-now-buy-now trend present on the French Riviera in 2023. Lately, Prada has additionally embraced celeb muses, with Prada’s Autumn/Winter 2022 menswear assortment that includes notable actors similar to Thomas Brodie-Sangster, Louis Partridge, Kyle MacLachlan, and Jeff Goldblum.
Learn Extra: Affect of Tapestry and Capri Monopoly on Mid-Luxurious Customers
Why Now?
In the case of income, Jing Every day reviews that Versace skilled a pointy decline, recording USD 201 million in income for the second quarter of the 2025 fiscal yr ending 28 September — a 28.2 p.c drop in comparison with the identical interval the earlier yr. In distinction, Jimmy Choo — one other luxurious model below Capri Holdings — reported a income enhance, reaching USD 140 million. This stark disparity highlights Versace’s challenges, making its monetary struggles extra pronounced throughout the Capri portfolio.
Prada posted double-digit development, reaching EUR 3.829 billion within the first 9 months of 2024. With prestigious manufacturers similar to Prada and Miu Miu, the Milan-based group might strengthen its portfolio with the addition of such an iconic home as Versace. Versace, in the meantime, is struggling a major drop in gross sales, recording a 28.2 p.c fall within the second quarter of 2024. This case weakens Capri Holdings, already confronted with the failure of a merger with the American group Tapestry, valued at roughly EUR 8.24 billion.
Why, in a time of financial uncertainty, would Prada contemplate buying Versace? The reply might lie in strategic economics — when markets are down, alternatives to speculate at a decrease price typically come up. Capri Holdings has struggled to keep up profitability, significantly with Versace. This precarious monetary state presents a well timed alternative for Prada to barter beneficial phrases for the acquisition. The present financial surroundings — marked by lowered valuations throughout industries — additional “sweetens” the deal.
Subsequent, the posh sector has seen rising consolidation, with bigger gamers buying smaller however famend manufacturers to consolidate market energy. Prada’s transfer may very well be each defensive and strategic, guaranteeing it stays aggressive towards conglomerates like LVMH and Kering. That is the place the importance of the aforementioned “Made in Italy” legacy is available in, to protect and champion Italian craftsmanship and heritage towards the French conglomerates giants of LVMH and Kering.
Learn Extra: Michael Kors Buying Versace for US$2 Billion, Blackstone to divest minority stake if deal goes by means of
In the case of potential pitfalls, sustaining Versace’s daring id whereas aligning it with Prada’s values would require cautious balancing. With international inflation and a possible downturn, luxurious spending might contract, making this a dangerous time for important capital investments. Reviving Versace’s profitability could necessitate operational restructuring, which might face resistance from present stakeholders.
All That Glitters…
On the flipside, right here is why the potential acquisition may very well be rumour. Prada has traditionally been cautious about overextending itself by means of acquisitions, focusing as an alternative on natural development and nurturing its present manufacturers. As reported by Reuters in October 2024, Miu Miu exceeded Prada Group’s expectations, contributing one-quarter of the group’s complete retail gross sales. All year long, the Prada Group achieved sturdy, high-quality development, mirrored in constructive income and margin beneficial properties. For the primary 9 months, revenues reached had reached roughly EUR 3.8 billion. Final yr as the posh trend trade skilled varied gross sales slumps, Prada noticed revenues rise by 16 p.c, the results of a rise in Miu Miu gross sales and continued development in Asia with a lift in gross sales coming from China and Japan.
The corporate’s current monetary success — posting double-digit development in 2024 — could point out that it’s well-positioned to behave, nevertheless it additionally raises the query: why tackle the dangers of buying a struggling model like Versace when Prada is prospering independently? Moreover, no official affirmation or public assertion has been made by both Capri Holdings or Prada, leaving room for hypothesis and trade gossip to amplify unverified rumours.
Learn Extra: Luxurious American Firm Tapestry to Purchase Capri Holdings in a Bid to Rival European Luxurious Conglomerates
Apparently, such rumours may work in Prada’s favour by conserving the model within the highlight and reinforcing its standing as a severe contender within the luxurious sector’s consolidation race. By being linked to a high-profile potential acquisition, Prada alerts its ambition and monetary energy to rivals and buyers alike, even when no deal materialises. This strategic notion play ensures that Prada stays a focus in discussions about the way forward for the posh market.
Prada’s potential acquisition of Versace alerts a daring ambition to reshape the posh trend panorama. Whereas the timing could seem precarious, it is also the proper second to grab an iconic model at a strategic inflexion level. For Prada, that is greater than a enterprise transaction — it’s a assertion of intent to redefine luxurious for a brand new period. The query stays: will Prada achieve harmonising two distinct but complementary legacies to create a powerhouse for the longer term? Solely time will inform.
Learn Extra: Michael Kors, Capri Holdings Welcome Joshua Schulman as its New CEO
For extra on the newest in trend and business-related reads, click on right here.