Prada-Versace: Fashion tweak

Benvenuta a casa! It was not a complete surprise that Prada paid to bring home its younger, edgier sister in 2025, given how well it has been doing of late. Prada registered revenue of $5.7 billion for 2024, a 17% increase on 2023 results, which can be attributed in the main to the runaway success of its Miu Miu label. The move also reverses the trend of the big names in Italian haute-couture falling into foreign ownership.

Commenting on the acquisition, Prada CEO Andrea Guerra labelled Versace “different and complementary” to Prada with “huge potential” that would add “a new dimension” to the Milan fashion house founded by brothers Mario and Martino Prada in 1913.

Cashing out
Capri Holdings took a hit on the deal, having bought the famous Milanese brand for $2 billion in 2018 with high hopes of improving its fortunes. Revenue growth proved elusive, however. Short-term uncertainty over tariffs are likely to have played a large part in Versace’s low price-tag, although the boost to Capri’s coffers will allow it to reinvest in its remaining brands, Jimmy Choo and Michael Kors, as was stressed by the company’s CEO, John D. Idol, “This transaction reflects our commitment to increase shareholder value, strengthen our balance sheet and power the future growth of Michael Kors and Jimmy Choo,” he stated, expressing faith that Prada “is the perfect company to further guide Versace into its next era of growth and success.”

The deal came hot on the heels of the announcement in March that Donatella Versace was stepping down as chief creative officer, a position she had held since the death of her brother Gianni in 1997. Her replacement, Dario Vitale, is well known to the Prada hierarchy, having spent a decade and a half at Miu Miu.  

The Prada group intends to leverage its industrial, retail and operational expertise to revive Versace’s fortunes 

In September, Vitale’s inaugural pieces for Versace debuted at a show in the Pinacoteca Ambrosiana art gallery in Milan. It’s Spring-Summer 2026 collection, the first not to be created by either Gianni or Donatella Versace, featured bold cuts and brash colors evocative of the label’s iconic 1980s looks and was given a glowing review by members of the fashion press in attendance.

Strike a pose
In acquiring another high-profile Italian fashion house Prada has signaled its ambition to become an Italian luxury multinational to rival LVMH – which owns Fendi – and Kering, the home of Gucci since 2004. Indeed, Prada has been the flying the flag for the Italian fashion industry in recent years, closing the gap on Gucci in terms of sales and valuation.  

Prada posted net revenue of over €4 billion for the first nine months of 2025, up 9% year on year. Versace, on the other hand, has suffered double-digit declines in sales growth, which were down 15% year on year to $193 million for Q4 2024.

If 2025 results are repeated, Versace would only account for around 13% of the revenue of the Prada group in 2026, but the new owner is confident that it can leverage Prada’s industrial, retail and operational expertise to revive Versace’s flagging performance. Describing Versace as a “unique and relevant luxury brand, with global reach and untapped growth potential,” Prada Group Chairman, Patrizio Bertelli, said the aim was to “continue Versace’s legacy celebrating and re-interpreting its bold and timeless aesthetic; at the same time [providing] it with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships.”

Signaling the importance of making a success of the Versace purchase, at the end of November Andrea Guerra stated that the luxury group had no ‌further plans to make acquisitions in the short term, telling journalists, “We’ll be ‍fully engaged with Versace for at least three years.”

Guerra’s work is cut out for him: The State of Fashion 2026, the latest of McKinsey’s annual surveys of fashion executives, noted that low consumer sentiment was continuing to afflict the luxury segment, although creative resets, such as the one taken by Versace in appointing a new creative director, could inject enthusiasm into the industry in the year ahead.

Prada customers typically skew older than Versace’s, and with the latter known for its edgier, more experimental identity – Liz Hurley’s ‘safety pin’ dress from the 90s is forever etched in the collective memory – Prada’s latest acquisition could help grow sales among a younger, more trend-driven clientele that grew up with Miu Miu, as it seeks to close the gap on Gucci as Italy’s most valuable fashion house.