By Elisa Anzolin
MILAN (Reuters) -Prada struck a deal on Thursday to buy smaller rival Versace from Capri Holdings for $1.375 billion, which includes its debt, in a move that unites two of the biggest names in Italian fashion.
Prada is seeking to expand, having defied a slowdown in luxury demand, while Versace has been operating at a loss. The merger strengthens Italy’s hand in a luxury industry led by French conglomerates.
The deal follows the announcement on March 13 that Donatella Versace was stepping down as the chief creative officer of the brand founded by her late brother Gianni.
“We aim to continue Versace’s legacy celebrating and re-interpreting its bold and timeless aesthetic,” said Prada Chairman Patrizio Bertelli.
“At the same time, we will provide it with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships,” added Bertelli, husband of Prada designer Miuccia Prada. The couple are leading shareholders in the company.
The price Prada has agreed to pay for Versace is a big discount to the roughly $2.15 billion including debt that Capri paid for Versace in 2018. Previously known as Michael Kors, Capri bought Versace from the Versace family and Blackstone.
Owning Versace, with its bold, baroque-style prints, will bring new customers to Prada, known for its minimalist style.
“Versace has huge potential. The journey will be long and will require disciplined execution and patience,” said Andrea Guerra, the CEO of Prada.
The move comes at a time when several acquisitions and IPOs have been scuttled in the wake of a global equity sell-off and fears of recession triggered by U.S. President Donald Trump’s new tariffs this month.
Since Prada’s acquisitions at the end of the 1990s of Helmut Lang and Jil Sander, which leading Prada shareholder Bertelli called “strategic mistakes”, the group has largely steered clear of major dealmaking.
(Reporting by Elisa AnziolinWriting by Keith WeirEditing by Matt Scuffham and Elaine Hardcastle)
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