Prada buys Versace: A Historic $1.4 Billion Deal Reshaping Italian Fashion

In one of the largest overhauls in high-end fashion in years, Prada buys Versace from Capri Holdings, the same company that owns Michael Kors, for a whopping $1.38 billion. That’s right—two legendary Italian fashion brands, famous for their daring and unique styles, are now under one fashionable umbrella.

This week’s announcement marks Prada’s biggest acquisition in its 112-year history. And it’s not only a giant price tag—it’s a fearless move to merge Prada’s minimalist chic with Versace’s maximalist flamboyance to form a power player to rival French luxury leviathans LVMH and Kering.

Let’s break down how this affects the fashion world, Versace loyalists, and why it’s such a game-changer for Prada.

Prada buys Versace for $1.38 Billion

Yes, you heard it correctly. Prada purchases Versace from Capri Holdings, and the talk is true. The deal, finalized to wrap up in the second half of 2025, arrives at a period when the luxury market is experiencing some severe headwinds—from financial slowdowns to shifting consumer preferences and tariff-related chaos.

But Prada doesn’t appear to care. While most brands have been fighting to stay afloat, Prada has been rising higher, thanks largely to its sister brand Miu Miu, which last year saw revenue soar by an astonishing 93%. Versace’s sales, meanwhile, declined 15% in the third quarter of the current fiscal year.

So why go through the trouble? Andrea Guerra, CEO of Prada, explained:

“Versace has tremendous potential. The ride will be long and will need to be executed with disciplined actions and patience.”

A Strategic Power Play: Italian Icons Unite

At first glance, Prada and Versace are polar opposites. Prada is ageless sophistication, clean lines, and elegant restraint. Versace? Brash prints, Medusa logos, and brazen glamour. But the very difference between them makes the deal so strategic.

As Morningstar analyst Jelena Sokolova points out, having brands with entirely different styles allows Prada to navigate fashion cycles more effectively and level out market fluctuations. It’s the best of both worlds—edgy and elegant.

And don’t forget, Prada buys Versace from Capri Holdings, the same group that owns Michael Kors, at a moment when international luxury is dominated by French conglomerates. This acquisition places Italian fashion firmly back in the limelight and provides Prada with an even greater presence on the international stage.

Goodbye Donatella

Additionally, Versace’s leadership has changed significantly as a result of the transaction. The brand’s creative force for more than 30 years, Donatella Versace, just retired. Her replacement? Dario Vitale—previously of Miu Miu—has already been installed. Perhaps this is the beginning of a new, revitalized chapter in the life of Versace.

Donatella’s exit isn’t sentimental just for fashion lovers—it’s symbolic. It signals a real transition, not just in ownership, but in identity. Prada has big plans to breathe new life into the iconic label, and with Vitale’s design expertise, we might be seeing Versace through a whole new lens soon.

Why the Price Dropped

It’s worth noting that Capri Holdings acquired Versace in 2018 for approximately €1.83 billion (then $2.1 billion). So, what happened? Why did Prada snag the brand for just $1.38 billion?

Market conditions had a lot to do with it. Tariff fears, inflation, and a decline in luxury spending meant Prada had the upper hand in negotiations. Rumors suggest that the original asking price was higher, but Prada held firm.

Plus, Capri Holdings itself has been in choppy waters. Its shares fell nearly 11% following the announcement—partly because of this sale and partly due to a blocked $8.5 billion acquisition by Coach’s parent company, Tapestry.

Still, Prada buys Versace with precision and timing that could end up paying off hugely in the long run.

What This Means for the Luxury Market

This acquisition isn’t just about two fashion houses. It’s a signal to the industry: Italian luxury isn’t going anywhere. In fact, it’s evolving.

With Prada’s strong performance—net sales jumped 15% last year to €5.4 billion ($6 billion)—and a renewed Versace under its wing, this could be the blueprint for how luxury brands survive and thrive in the 2020s.

Combining Versace’s unrealized potential with Prada’s steady growth helps diversify offers and creates new prospects in places where daring fashion is becoming more popular.

The Takeaway: A New Chapter in Italian Fashion

In short, Prada buys Versace from Capri Holdings, the group that also owns Michael Kors, and it’s a deal that could reshape the luxury landscape for years to come.

It’s bold, it’s smart, and it’s rooted in a belief that Versace can shine again—with the right strategy and support. If Prada can channel its magic and turn around Versace’s recent struggles, this could be the luxury world’s comeback story of the decade.

So, fashion lovers—watch this space. The union of Prada and Versace could bring more than new designs to the runway. It could mark the dawn of a powerful Italian revival in an industry ready for change.