Prada Group announced a deal on Thursday to buy Italian Versace from Capri Holdings under the terms of a fashion house of 1.25 billion euros ($1.4 billion).
Prada says Versace's “highly recognizable aesthetics…forms a strong complement to its portfolio,” which includes the Prada and Miu Miu fashion brands. It said Milan-based Versace offers “significant unexplored growth potential”.
The final value of the transaction will be adjusted in the second half of the year and is expected to be adjusted in the second half of the year. It will be funded by 1.5 billion euros in new debt and has been approved by the Prada and Capri Holdings Committee.
“Versace will maintain its creative DNA and cultural authenticity while benefiting from the full power of the group's considerable merger platform, including industrial capabilities, retail execution and operational expertise,” Prada said in a statement.
Versace was founded in 1978 by the late Gianni Versace and owned by Capri Holdings since 2018, which includes Michael Kors and Jimmy Choo.
Capri Holdings paid $2 billion for Versace, but has struggled in the recent era of “quiet luxury” to position the stalwart of Italian fashion with its sexy outline and loud patterns.
Last month, Capri Holdings appointed Dario Vitale as creative director to replace Donatella Versace, who took on the role after his brother's 1997 murder. Vitale is from Miu Miu, a successful youth-oriented brand in the Prada Group.
Versace was given the new role of the chief brand ambassador in The Swing, which is widely seen as setting up the scene for the long-term Prada sales. Miuccia Prada acknowledged the organization's intervals during Milan Fashion Week in February.
