Will Prada Group become the next luxury powerhouse?

On Thursday (10 April), Prada Group agreed to amass Versace from Capri Holdings in a $1.375bn (£1bn) deal, confirming weeks of hypothesis and consolidating two of Italy’s largest vogue companies.

Rumours of Prada Group circling Versace first emerged in January 2025, following final yr’s termination of Capri’s $8.5bn (£6.8bn) merger with Coach proprietor Tapestry. The hypothesis intensified final month with the appointment of Dario Vitale, former design director at Prada Group’s Miu Miu, as inventive director of Versace.

Prada Group’s acquisition of Versace “is smart each financially and when it comes to timing”, stated Jelena Sokolova, senior fairness analyst at Morningstar: “Prada’s profitability and money place has strengthened in recent times, boosted by its robust model momentum.”

The group has defied the luxurious sector’s downturn with a 93% retail gross sales enhance within the 12 months to 31 December 2024.

In distinction, Capri’s efficiency has been “weak”: full-year income for the 12 months ended 30 March 2025 is anticipated to succeed in $4.4bn (£3.3bn), a fall of 15% yr on yr from $5.17bn (£3.9bn).

Capri won’t be out of the woods if “financial challenges persist in 2025, as present market turmoil and geopolitical uncertainty suggests”, stated Sokolova.

“This acquisition makes strategic sense since each manufacturers cross by means of vogue cycles and possession of a number of manufacturers with very totally different aesthetics may assist clean the cyclicality of efficiency,” she added.

At first look, Prada and Miu Miu’s work-appropriate knee-length, gray wool pencil skirts and matching blazers are worlds away from Versace’s signature gold-plated maximalism.

In enterprise phrases, nevertheless, the diverging aesthetics are “a strategic complement”, stated Eric Briones, luxurious strategist and co-founder of the Paris Faculty of Luxurious.

“Prada’s cerebral minimalism and Versace’s unapologetic maximalism type a dynamic duality, capturing each temper of the luxurious zeitgeist and weathering its storms,” he informed Drapers.

Luca Solca, senior analyst of worldwide luxurious items at Bernstein, agreed that Prada and Versace “are complementary”. Nevertheless, equally to many turnaround efforts, Versace’s revival below Prada Group may take “longer and costlier than anticipated, doubtlessly distracting from the core enterprise”, he warned.

Versace “will want investments to reboot the model, making it an preliminary drag to Prada’s short-term profitability”, stated Morningstar’s Sokolova.

The group can even must implement learnings from “managing the acquisition of out of doors manufacturers”, together with the “errors”, Briones added.

Prada Group’s virtually decade-long possession of vogue label Jil Sander, between 1999 and 2008, was marred with inventive variations between Sander and the group’s then-CEO Patrizio Bertelli.

Not like Jil Sander, which was acquired by Prada Group with the eponymous founder remaining on the helm, Versace comes below the group with recently-welcomed inventive director Dario Vitale, succeeding the sister of the luxurious home’s late founder, Donatella Versace, after 28 years on the helm.

Vitale’s appointment marks a “inventive reset” within the luxurious home’s 47-year historical past, stated Briones, with the incoming inventive director “poised to infuse Versace with a revitalised inventive pulse tailor-made for at present’s luxurious codes”.

His arrival at Versace doesn’t come with out challenges, stated to Fabio Becheri, former advertising and marketing government T Ferragamo and luxurious conglomerate Kering.

Below Prada Group’s possession, Versace’s positioning inside the luxurious vogue realm “should be reassessed” and Vitale’s mission goes far past “designing a group”.

“He must be a part of redefining Versace’s new id and positioning with the brand new house owners at Prada Group and the administration they are going to put in place.

“As a lot as Vitale has been a trusted collaborator of the Prada [and] Bertelli household, with no new clear strategic framework for the model, dashing into design may result in misalignment, just like the disjointed transition we noticed with [former creative director] Sabato De Sarno at Gucci below three totally different CEOs [between 2023 and 2025],” he added.

Versace AW24

Questions have emerged as as to whether Prada Group is seeking to broaden its attain and problem the dominance of luxurious conglomerates Kering and LVMH.

The acquisition of Versace “shifts Prada Group from a fiercely impartial model, which maintained its picture regardless of the size of its enterprise, in direction of changing into a part of the bigger vogue machine”, warned impartial retail marketing consultant, and former Issey Miyake and Saks Fifth Avenue government, Elena Kirioukhina: “It appears to be like like one other large group, the place manufacturers don’t have anything to do with one another, is within the making.”

Though the acquisition heralds “the beginning of a brand new block” in luxurious vogue, “it could be a mistake to see a head-on confrontation with LVMH or Kering”, Briones informed Drapers.

Finally, Prada Group’s acquisition of Versace marks not only a consolidation of manufacturers, however a pivotal guess on the ability of distinction — the place minimalism meets maximalism to navigate a shifting luxurious panorama.