Milan: Italian fashion house Prada announced Thursday that it has reached a deal with Capri Holdings to buy Versace for 1.25 billion euros ($1.39 billion).
The acquisition will create a luxury goods group with revenue of over €6 billion, which can better compete with industry giants such as French conglomerates LVMH and Kering, which slows globally.
“We are delighted to welcome Versace to the Prada Group and build a new chapter for a brand, our strong commitment to our creativity, craftsmanship and heritage,” said Patrizio Bertelli, Chairman and Executive Director of Prada Group in a statement.
In 2018, Capri paid 1.83 billion euros (at the time $2.1 billion) to acquire Versace, which was previously owned by the Versace family by 80% and the US investment fund BlackRock 20%.
With sales down, it made the Milan-based label for sale and began exclusive negotiations with Prada at the end of February.
Capri also owns Jimmy Choo and Michael Kors and has to accept a price reduction in Prada amid market turmoil caused by tariffs by U.S. President Donald Trump.
The Financial Times reported that the initial price was expected to be around $1.6 billion, but it has been declining in recent days.
Last month, Donatella Versace resigned as a creative director after more than 30 years, widely seen as a prelude to the agreement.
Her older brother Gianni murdered in 1997, and she took over in 1997, who founded the Milan record company in 1978.
But on April 1, she was replaced by Dario Vitale, who oversees sales of Prada’s sister brand Miu Miu, with a goal of younger customers.
Donatella Versace, 70, is now the label’s lead brand ambassador.
