Luxury Italian fashion house, Prada, has snatched up its rival and fellow Milan brand Versace for a whopping €1.25 billion ($2.2 billion AUD) despite global market chaos.
Prada Group bought the brand from US luxury group Capri Holdings, meaning that Versace is back under Italian control since Capri Holdings bought it for $2 billion USD ($3.2 AUD) in 2018.
Capri Holdings currently owns luxury brands Jimmy Choo and Michael Kors. Versace had been struggling to maintain a stronghold in the fashion industry amid the ‘quiet luxury’ trend, which clashed against Versace’s ornate design choices.
Fashion executive and chairman of Capri Holdings John Idol made the decision for Versace to switch from its signature designs to more muted ones over the past few years, and mentioned that its bold style had become “a crutch” for the brand back in February this year.
“You don’t want a store that is 70 per cent Baroque…that became a bit of a crutch for the company,” Idol said in a call to analysts earlier this year.
Prada’s purchase places both fashion houses back under Italian control. (Source: Getty Images)
In a statement announcing the news, Prada Group described Versace as the “epitome of Italian luxury” with “remarkable” brand awareness.
“With its highly recognisable aesthetic, the brand constitutes a strongly complementary addition to the Prada Group’s portfolio and displays significant untapped growth potential leveraging multiple value creation levers.
“Within the Prada Group, Versace will maintain its creative DNA and cultural authenticity, while benefitting from the full strength of the Group’s consolidated platform, including industrial capabilities, retail execution and operational expertise.”
Prada Group also owns Miu Miu, Car Shoe, Church’s, and Marchesi 1824.
There are no current plans to change Versace’s current CEO Emmanuel Gintzburger, and head designer of Prada Miuccia Prada will not be involved in Versace’s creative ventures.
“We are delighted to welcome Versace to the Prada Group and to build a new chapter for a brand with which we share a strong commitment to creativity, craftsmanship and heritage,” Prada Group Chairman and Executive Director, Patrizio Bertelli, said.
“Our organisation is ready and well positioned to write a new page in Versace’s history, drawing on the Group’s values while continuing to execute with confidence and rigorous focus.”
Prada Group also owns youth-oriented fashion label Miu Miu. (Source: Getty Images)
Current Versace brand ambassador and former chief creative director, Donatella Versace, stated in an Instagram Post that she is “absolutely delighted” by the news.
“I am absolutely delighted for Versace to become part of the Prada family,” Donatella wrote.
“Gianni and I have always had a huge admiration for Miuccia, Patrizio and their family. I am honoured to have the brand in the hands of such a trusted Italian family business and I am ready to support this new era for the brand in any way that I can.”
Donatella’s post on Instagram. (Source: Instagram/@donatella_versace)
Donatella became head of the fashion house in 1997, following the murder of her brother, Gianni Versace. Gianni founded Versace in 1978.
The Italian government also welcomed the news, and Industry Minister Adolfo Urso stated that “a historic brand of ‘Made in Italy’ is coming back Italian” in response to Prada’s purchase.
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