Their aesthetics may appear to be as far apart as oil and water, but Prada and Versace are now set to live under the same fashion umbrella.
Speculation about Prada Group’s interest in buying Versace — and in April the confirmation of the deal in April —made headlines for months, also in connection to Donatella Versace yielding her role as chief creative officer after 28 years.
When Prada, which is publicly listed in Hong Kong, revealed it was acquiring 100 percent of Versace, Patrizio Bertelli, the group’s chairman and executive director, said the two companies shared “a strong commitment to creativity, craftsmanship and heritage,” and that the goal was “to continue Versace’s legacy celebrating and reinterpreting its bold and timeless aesthetic.”
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At the time, his son Lorenzo Bertelli — head of CSR at the Prada Group who has taken on the role of executive chairman of Versace following the closing of the deal earlier this month — underscored that “a lot of people may think that Versace is far away from the aesthetics of our existing brand portfolio, but I believe this is exactly a strength for our group, because there are no overlaps in terms of creativity and in terms of customers.”
For this reason, the acquisition “is super important to really reach new audiences and to express a different kind of message,” he said, adding he was confident in the “huge potential” of Versace. As reported, sources believe he was especially keen to take control of Versace. The Prada Group also controls Miu Miu, Church’s, Car Shoe and the Pasticceria Marchesi pastry shop.
The transaction was funded by 1.5 billion euros of new debt composed of a 1 billion euro term-loan and 500 million euro bridge facility.
Before confirming the acquisition of Versace from Capri Holdings for 1.25 billion euros, sources believed Prada was also looking at buying Jimmy Choo, but that deal never materialized.
The latest deal returns one of the country’s iconic fashion brands to Italian ownership.
In 2018, Donatella Versace reached a $2.1 billion deal to sell her family’s company to Michael Kors Holdings, which subsequently changed its name to Capri Holdings. At the time John Idol, chairman and CEO of Kors, crowed that the acquisition would give the group a third luxury pillar and further lessen its dependence on the Kors brand. Idol was so confident about the deal that he even renamed the group Capri after the Italian island.
But Versace never really took off under Capri and the brand went through a period of decline. Capri, reporting its fiscal fourth-quarter figures, said Versace’s revenue fell 21.2 percent to $208 million in the period. The Versace business was not included in Capri‘s first-quarter sales as it was categorized as a discontinued operation.
The U.S. group had struggled for years, though, mainly due to slowing sales in the core Kors business which affected its ability to focus on Versace. There were questions over Capri’s strategy for Versace, and also what the company would do with Donatella Versace, who helped grow the brand following the murder of her brother Gianni in 1997. Finally in March, Donatella Versace was named chief brand ambassador of the fashion house and she stepped away from design duties.
Effective April 1, she was succeeded by Miu Miu alum Dario Vitale, who was named chief creative officer. He unveiled his first collection in September, receiving positive reviews from retailers for his colorful and audacious designs that he said embraced Gianni Versace’s legacy and that sparked immense interest in the brand among Gen Zers.
At the same time, the collection, paraded at Milan’s Pinacoteca Ambrosiana museum, had a streetwear sensibility that left some Versace customers baffled about the new direction of the brand.
Vitale’s tenure did not last, though, as he suddenly exited the brand on Dec. 12, in a departure that was characterized by Lorenzo Bertelli as mutually agreed upon.
That may well be, but sources believe otherwise.
Vitale was previously ready-to-wear design director at Miu Miu, which he left in January. Market sources said Vitale was aware that the Prada Group had been in discussions to acquire Versace since the end of last year, even before he left Miu Miu. They said he also knew that another designer was in the wings for Versace and that it was unlikely he would be kept on there if he jumped from Miu Miu.
Despite this warning, market sources say Vitale was keen to build a future outside of the Prada Group and that this reunion wasn’t part of his plans. Also, sources believe Prada’s top brass doesn’t take any departure well, especially from longtime employees.
A successor is expected to be named soon, and sources say there are two designers especially linked with both Prada and Versace that could fit the bill.
Anthony Vaccarello, current creative director of Saint Laurent, is a protege of Donatella Versace’s, who named him creative head of the Versus line in 2015. He has contributed to building Saint Laurent’s success since 2016 but parent company Kering is in the midst of a major restructuring under new CEO Luca de Meo, who is said to be reviewing every business and brand under his purview.
Sources also pointed to Pieter Mulier, creative director of Alaïa, who is close to Raf Simons, co-creative director of the Prada brand. However, Alaïa parent Compagnie Financière Richemont may be loath to see Mulier go as he has been injecting new life into the brand since 2021.
Miuccia Prada will not be involved in the creative process of Versace.
At the moment, Emmanuel Gintzburger, CEO of Versace, is staying on.
Capri’s Idol has said proceeds from the sale would be used “to repay the majority” of the company’s debt and repurchase shares. The hope is that with lower debt Capri can get the Kors brand back on track and reestablish it as one of America’s premier fashion labels.
Analysts have so far given generally positive reviews to Prada’s purchase of Versace, confident in the group’s verticalized industrial platform and agreeing with the Bertellis’ belief that there are no overlaps in terms of creativity and customers between the two brands. The different aesthetic that Versace brings to the group also could help buttress Prada and Miu Miu as fashion cycles pass through.
The acquisition is seen as contributing to further growth of the group, which in the first half of the year reported an 8 percent rise in revenues to 2.74 billion euros. That result was greatly helped by Miu Miu, where retail sales climbed 49 percent to 780 million euros in the first half.
Versace was expected to achieve revenues of $810 million in 2024 with an operating profit margin forecast to be high-single-digit negative, according to Prada Group CFO Andrea Bonini.