Prada has agreed to buy Versace in a 1.25 billion euro (£1.1 billion) deal that will see two of Italy’s biggest luxury fashion brands come together.
The Milan-based Italian fashion house said it was acquiring 100% of the brand from Michael Kors and Jimmy Choo owner Capri Holdings.
Prada said Versace would complement its portfolio of brands, which also includes Mui Mui and Church’s.
It was bought by Capri, which is listed in New York, in 2018 for two billion euros (£1.7 billion).
Founded in 1978 by Gianni Versace, also in Milan, Versace is known for its distinctive colours and patterns, and has grown from haute couture to designing and making a range of clothes, shoes, and accessories sold worldwide.
Donatella Versace took over the family business when her brother Gianni was killed in 1997, and has shaped the brand’s modern identity with designs worn by stars such as Dua Lipa, Angelina Jolie and Sabrina Carpenter.
Last month, the businesswoman and designer stepped down from her role as head of the fashion brand after almost three decades, although continued at the firm as its chief brand ambassador.
She was replaced by former Mui Mui design and image director Dario Vitale.
Prada’s acquisition will be funded by 1.5 billion euros (£1.3 billion) of new debt comprising of a 1 billion euro (£860 million) loan and a 500 million euro (£431 billion) bridge facility.
It is expected to complete over the second half of 2025.
Andrea Guerra, Prada’s chief executive, said: “The acquisition of Versace marks another step in the evolutionary journey of our group, adding a new dimension, different and complementary.
“Versace has huge potential. The journey will be long and will require disciplined execution and patience.
“The evolution of a brand always needs time and constant focus.
“Notwithstanding the sector uncertainties, we look at the future with confidence, focused on a long-term strategic vision.”
The luxury sector has faced pressure in recent years with consumer confidence taking a knock from the rising cost of living.
Versace has been operating at a loss and saw its revenues fall 15% in the latest quarter, according to an update in February.
Capri said the sale of Versace will help strengthen its balance sheet, grow value for shareholders, and help it make more strategic investments in Michael Kors.
