Prada struck a $1.4 billion deal to buy Versace intending to stop the brand from turning to stone (Versace’s logo is a Medusa head). And Prada’s giving the job of reviving Versace to Italian fashion royalty: Lorenzo Bertelli, designer Miuccia Prada’s son and heir to her eponymous empire.
Bertelli, who’ll become Versace’s executive chairman once the purchase is completed, told Bloomberg yesterday that the brand is bigger than its revenue, which has been bleak lately. Capri Holdings, which is selling Versace, said it expected the design house to make $810 million in revenue this fiscal year, a steep fall from $1 billion last year. Bertelli pushed for the Versace deal, Reuters reported, as he prepares to inherit the now-expanded company.
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Its holdings consist of namesake, pricey brand Prada and trendy, affordable offshoot Miu Miu, as well as pastry-maker Marchesi, America’s Cup sailing team Luna Rossa and two smaller shoe brands. The thread tying the panettones, catamarans and handbags together is Italian luxury. Versace fits right in, and its acquisition helps position Prada against larger rivals on the global stage:
Prada has proven immune to a larger slump in the luxury sector as shoppers, especially in China, limit brand names in their budgets. The Prada Group has grown for 19 straight quarters, with its 2024 revenues jumping 17%. Miu Miu has been a standout, with 93% sales growth last year as Gen Z splurged on its micro-mini skirts and “Arcadie” bags.
French luxury conglomerate LVMH’s sales, meanwhile, grew a tepid 1% annually last quarter after two consecutive quarters of declines, while Gucci-parent Kering’s fell 10%. Capri Holdings has struggled to turn a profit and is attempting to pay down billions in debt and rebuild core brands like Michael Kors with the proceeds from selling Versace. The Federal Trade Commission shut down a planned merger of Capri and Coach-parent Tapestry last year.
Haute and Cold: The luxury market has been in a prolonged downturn as shoppers tighten their purse strings. But a mixed bag of results from fashion brands shows that they’re still up for the occasional splurge: They’re just being more selective about it, and making the luxury market more competitive. Bertelli isn’t ruling out further acquisitions that would make Prada a larger fashion powerhouse, but also didn’t confirm any plans, even as Giorgio Armani’s death last month puts that brand’s future in flux.
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