Prada Strikes $2.2 billion deal for Versace

Deal talks had been dragging on with market turmoil.

Versace, which was founded more than 40 years ago, is an Italian fashion house known for its flashy and sometimes risqué designs. Last month Capri appointed Dario Vitale to succeed Donatella Versace as chief creative officer of the Versace brand.

Prada said it would acquire Versace from fashion conglomerate Capri Holdings for US $1.38 billion (AU $2.2b), salvaging a deal that was at risk of collapsing because of the market upheaval.

The deal was announced Thursday, confirming an earlier report by The Wall Street Journal.

The Journal reported Wednesday that the deal’s completion was uncertain because Prada’s namesake family still hadn’t given its final approval. That approval came early Thursday morning, according to people familiar with the matter.

President Trump’s escalating trade war had been wreaking havoc across Wall Street and forcing companies to rethink big decisions, with the retail industry being hit particularly hard.

Midday Wednesday in the U.S., Trump authorised a 90-day pause on certain tariffs to most countries, triggering a global surge in stocks.

Donatella Versace’s stepped aside as the creative director of Versace last month. Picture: Michael Loccisano/Getty Images

Versace, which was founded more than 40 years ago, is an Italian fashion house known for its flashy and sometimes risqué designs. Last month Capri appointed Dario Vitale to succeed Donatella Versace as chief creative officer of the Versace brand.

Capri, whose stable of luxury brands also include Michael Kors and Jimmy Choo, struck a $2.1 billion deal for the Versace business in 2018 as part of a plan to create a global luxury fashion group.

In 2023, Capri had agreed to sell itself to Coach owner Tapestry for $8.5 billion. That deal died the next year, however, after the Federal Trade Commission said the tie-up would hurt competition in the market for affordable luxury handbags.

The scuttled Tapestry deal along with Versace’s poor performance had heaped pressure on Capri to sell the struggling business.

Capri and other purveyors of luxury brands are grappling with weak demand as shoppers rein in spending on pricey products. Trump’s tariffs have exacerbated that challenge by forcing the industry to deal with the prospect of higher costs to source raw materials from Asia and raising the likelihood of a recession.

Selling Versace would allow Capri to focus on culling debt and turning its other banners around.

Shares of Prada, which is based in Milan but listed in Hong Kong, rose almost 5% on Thursday but are down about 7% over the past five trading days. Capri shares were slightly lower in premarket trading Thursday after surging more than 30% Wednesday. The stock is down about 22% year to date.

The Wall Street Journal