Italian luxury giant Prada buys Versace – at a discount

Prada announced Tuesday that it has acquired Versace, bringing two major Italian luxury fashion houses under one roof.

$1.38bn (£1.04bn) deal It’s well below the nearly $2 billion that Versace’s former parent company, Capri Holdings, paid for the brand in 2018.

The acquisition expands Prada’s portfolio of designer brands, including Miu Miu, as it aims to compete with rivals such as French conglomerate LVMH, which owns Louis Vuitton as well as Dior and Fendi.

Famous designer Donatella Versace left her position as the brand’s creative chief in March, after 27 years at the fashion company known for its eye-catching styles and iconic Medusa head logo.

He took over the company after the murder of his brother Gianni in 1997. He was replaced by Dario Vitale, former design director of Prada’s youth-focused luxury brand Miu Miu.

The company is being sold at a loss of approximately $700 million following slowing sales of Versace and the sale of Capri Holdings’ other brands, including Michael Kors and Jimmy Choo.

During its ownership by Capri Holdings, Versace shifted from its recognizable ornate designs to embracing a more minimalist trend while raising prices.

Prada said in a one-line statement on Tuesday that it had successfully completed the acquisition of Versace by obtaining all necessary regulatory approvals.

The firm said the proceeds from the sale would help reduce the debts of Versace’s former parent company, Capri Holdings.

Capri CEO John D Idol said: “We plan to use the proceeds to repay the majority of our debt, which will significantly strengthen our balance sheet.”

Prada CEO Andrea Guerra said earlier this year that Versace had “huge potential.”

“The journey will be long and will require disciplined practice and patience,” he said.