Prada Eyes Versace: Exclusive Acquisition Talks Underway

According to reports, the Prada Group is in exclusive negotiations to acquire Versace and has signed a binding agreement for due diligence of the Versace brand, which would also include Jimmy Choo.

What's Happening:

• The Prada Group is reportedly in talks to acquire Versace from Capri Holdings.

• Prada is working with Citi as its advisor on the deal.

• Capri Holdings has been considering selling Versace and Jimmy Choo since December 2024, after a proposed merger with Tapestry collapsed.

Why Prada is interested:

• Market expansion: Versace's bold aesthetic would allow Prada to reach a different luxury market segment3.

• North American presence: Versace has a strong presence in North America, where Prada's influence has been more limited3.

• Strategic economics: Acquiring Versace now could be a strategic move, as opportunities to invest at a lower cost arise during economic uncertainty.

• Competitive edge: The luxury sector has seen increasing consolidation, and Prada's move could ensure it remains competitive against conglomerates like LVMH and Kering.

• Synergy: The acquisition would allow the group to expand its range of offerings, strengthen its presence in key markets.

Versace's situation:

• Versace experienced a sharp decline in revenue, recording USD 201 million for the second quarter of the 2025 fiscal year, a 28.2% drop compared to the previous year.

• The worldwide drop in luxury demand is hindering the growth of the fashion house, whose performance has deteriorated in recent times.

Other potential buyers:

• Other fashion groups and private equity funds are reportedly interested in acquiring Versace.

• Exor and Kering also considered the operation a year ago.

Challenges and considerations:

• Maintaining Versace's bold identity while aligning it with Prada's values will require careful balancing.

• Global inflation and a potential downturn could contract luxury spending, making this a risky time for significant capital investments.

• Reviving Versace's profitability may necessitate operational restructuring, which could face resistance from existing stakeholders.