In a move that signals a major shift in the fashion world, Prada has officially acquired Versace for €1.25 billion. The deal, finalized with Capri Holdings, makes Versace part of one of Italy’s most iconic fashion families. The final price was €180 million lower than expected due to global market shifts, including inflation, trade tariffs, and slowed luxury spending.

This deal follows months of talks and speculation. It also comes after Capri Holdings failed to merge with U.S. fashion giant Tapestry. That deal, worth $8.5 billion, was blocked by U.S. regulators. Facing pressure to lower its debt, Capri Holdings was forced to consider selling assets. Versace, known for its bold and glamorous style, was among the most valuable brands up for grabs.

Prada Moves to Strengthen Italian Fashion Power

Prada Group chairman Patrizio Bertelli called the deal a “bold step” that opens a new chapter for both brands. “We are proud to bring Versace into our family. This is about more than business—it’s about protecting Italian heritage and keeping it strong on the global stage,” Bertelli said.

With this move, Prada aims to gather the best of Italian fashion under one roof. Versace joins Prada’s growing portfolio, which includes brands like Miu Miu, Church’s, Car Shoe, Luna Rossa, and Marchesi. This strategy echoes earlier moves from the 1990s and early 2000s when Prada tried to expand by acquiring Jil Sander and Helmut Lang, although those ventures did not last. This time, Prada hopes things will be different.

Fashion experts say the timing is smart. With many global luxury brands facing slowdowns, Prada has kept growing. In 2024, the group posted €5.4 billion in revenue, a 17% increase from the year before. Much of that success came from Miu Miu, which gained viral fame through mini skirts, ballet flats, and bold campaigns aimed at Gen Z.

Leadership Changes and Donatella’s New Role

One of the biggest changes to come with this deal is in leadership. Donatella Versace, who has been the creative force behind the brand since her brother Gianni Versace’s death in 1997, will no longer serve as the head designer. Instead, she will become chief brand ambassador.

In her new role, Donatella will appear at major public events, handle red carpet partnerships, and support social causes tied to the brand. This shift marks the end of a 27-year era where she kept Versace relevant, edgy, and beloved by celebrities and fashion lovers alike.

Taking over creative leadership is Dario Vitale, who was previously a top designer at Miu Miu. Known for mixing classic shapes with modern energy, Vitale is expected to bring a new look to Versace while respecting its roots. Some fans are nervous about the change, but others are excited to see what the future holds.

Different Styles, Shared Vision

On paper, Prada and Versace seem like opposites. Prada is often described as cool, intellectual, and minimalist. Versace is famous for gold chains, bold prints, and daring silhouettes. But despite their differences, both brands are rooted in Italian craftsmanship and innovation.

In an old interview, Donatella said, “We inspire each other. I love what Miuccia does, and she loves what I do.” That respect is key to the success of this merger.

Fashion insiders believe the brands will stay separate in style but united in purpose. The goal is not to blend their looks but to help each other grow while keeping their identities strong.

A Changing Fashion Industry

The Prada–Versace deal comes at a time when the luxury market is shifting. Younger buyers are more focused on values, sustainability, and creativity. They also shop online more than ever before. Many traditional brands are racing to adapt.

Capri Holdings, which bought Versace in 2018 for $2.1 billion, struggled to keep pace. Despite efforts to expand Versace’s global presence, including new stores and digital campaigns, sales fell short of expectations. After the failed Tapestry merger, Capri’s future looked uncertain.

For Prada, this deal is a chance to grow smarter. By adding Versace to its family, it hopes to attract new fans, boost profits, and defend Italy’s place in the fashion world. The company also plans to invest in sustainability, digital sales, and talent development.

A New Future for Versace and Prada

Only time will tell if this big move will pay off. But for now, Prada and Versace are starting a new journey together. The world will be watching closely to see what they create.

With Donatella still involved and fresh creative voices stepping in, the next era of Versace may be just as bold as the last—if not more.