Prada Group acquires Versace in a $1.37 billion deal, ownership shifts after post-pandemic struggles

Dubai: The Prada Group announced Tuesday that it has officially purchased Versace in a $1.37 billion deal. The move takes the fashion house known for bold, sensual silhouettes into a new ownership structure alongside Prada’s industrial design direction and Miu Miu’s youth-focused market lead.

The closely tracked acquisition ends Versace’s chapter under the US luxury group Capri Holdings, which held the brand through the post-pandemic period.

“With the successful completion of the sale of Versace, we plan to use the proceeds to repay the majority of our debt, which will substantially strengthen our balance sheet,” said John D. Idol, Chairman and CEO of Capri Holdings. “As a result, this transaction will significantly reduce our leverage ratio and provide greater financial flexibility to both invest in our growth as well as return capital to shareholders in the future.

“We remain focused on executing our strategic initiatives across Michael Kors and Jimmy Choo to maximise the potential of our iconic brands. Looking ahead, we believe we are on track to stabilise our business this year while establishing a solid foundation for a return to growth in fiscal 2027."

His remarks came in line with the firm’s official transaction disclosure shared publicly Tuesday.

The acquisition places Versace, known for sensual styling and immediate visual recognition, in contrast with Prada’s long-running appeal built on experimental design, calibrated tailoring, selective distribution and youth-market product bets under Miu Miu. Retail desks say portfolios compress faster when ownership structures centralise capital allocation rules and brand investment budgets under a single global markets-facing holding group.

Versace’s performance has struggled to match its pre-pandemic M&A heat. The brand delivered uneven top-line contributions as part of Capri Holdings, the parent company confirmed at market open, following slower post-2022 retail momentum and a volatile early 2025 performance after its airline IPO peers and luxury export baskets were repriced.

Debt reduction 

Capri Holdings confirmed in regulatory filings shared Tuesday that cash inflows from the Versace sale will repay the majority of its debt, reducing leverage and recalibrating its balance sheet ahead of fiscal 2027 investment planning, per the company’s filings made accessible through the US Securities and Exchange Commission.

The filings are consistent with disclosure documents including its 10-K and 10-Q submissions.

The transaction alters Milan’s luxury brand leadership map, putting two of Italy’s most recognised silhouettes-heavy luxury names, Versace and Prada, inside a shared portfolio structure run by centralised capital and licensing committees. The acquisition is not expected to be reversed or adjusted beyond contractual post-closing terms, Idol confirmed in published filings.

Officials close to the deal described the transaction as one that could rationalise manufacturing inputs, distribution pacts and advisory pricing guides for core merchandising and runway capital budgets as early-cycle bets on new ownership begin.

As Prada builds investor and retail budgets into Versace’s design and distribution, markets expect the next era of ownership to favour brand revival driven by debt flexibility, regulated capital planning and market contrast appeal for a Milan group aiming to reprice its “growth through iconic brands” execution agenda.