Prada is Officially Buying Versace for Almost $1.4 Billion

A different kind of fashion shakeup: Prada will soon be the owner of Versace. On Thursday, it was confirmed that the Prada Group will purchase Versace for 1.25 billion euros ($1.38 billion) from its previous owners, Capri Holdings.

“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,” said Patrizio Bertelli, chairman and executive director of Prada Group, in a press release. He continued, speaking on the aim to further Versace’s legacy while “celebrating and reinterpreting its bold and timeless aesthetic.”

But Prada doesn’t own Versace just yet. The purchase was approved by both companies’ boards, but the deal still has to close. It’s expected to become official in the second half of this year.

This is not Prada Group's first purchase of an outside brand. In 1999, the group acquired Helmut Lang and Jil Sander in hopes of becoming something of a fashion conglomerate—hough it sold the former in 2005 and divested from the latter the next year. Currently, the Prada Group owns Prada and Miu Miu as well as the Italian sailing team Luna Rossa, shoe brands Church’s and Car Shoe, and pastry brand Marchesi. Versace will therefore be the group’s third ready-to-wear brand, albeit the only one not currently designed by Miuccia Prada. For those reasons, Versace will bring a very different aesthetic and, likely, customer into the mix. Andrea Guerra, Prada Group’s chief executive officer, said the acquisition adds “a new dimension, different and complementary.”

There were rumors Jimmy Choo, another Capri Holdings brand, would also be part of the deal, but as of now, it is not involved in this current transaction. Capri is an American company that also owns Michael Kors. It was positioning itself as a rival of French luxury groups like LVMH and Kering. While Capri’s goals did not quite come to fruition, it seems the Prada Group could be building itself up as the Italian counterpart.

The news comes just a month after it was announced that Donatella Versace would be stepping down as Versace’s creative director, a job she took over following her brother Gianni’s death in 1997. She will remain at the company as chief brand ambassador, mostly handling Versace’s philanthropic endeavors. Donatella was replaced by Dario Vitale, incidentally a Miu Miu alum, one who worked very closely with Miuccia and will seemingly do so again now in his new role at Versace.