Luxury fashion brand, Prada Group has acquired crosstown Milan fashion rival, Versace from the U.S. luxury group, Capri Holdings Ltd, (parent company of Michael Kors and Jimmy Choo) for $1.38 billion. Capri Holdings is restructuring after a failed merger with Tapestry (owner of Coach, Kate Spade and Stuart Weitzman), which was blocked by the US Federal Trade Commission in last November. The deal includes Versace’s debt, is a big discount to the $2.15 billion debt that Capri, then known as Michael Kors, paid for Versace in 2017 when the Versace family and Blackstone sold it.  The acquisition strengthens Italy’s position in the global luxury fashion market, which is largely dominated by French conglomerates like LVMH and Kering. Versace’s bold baroque-stule prints will attrat customers to Prada known for its minimalist style. Capri had to accept a reduced price from Prada amid the market turmoil caused by US tariffs. Donatella Versace will remain with Versace in a brand ambassador role, Dario Vitale will become the new creative director.

“ We are delighted to welcome Versace to the Prada Group and to build a new chapter for a brand with which we share strong commitment to creativity, craftsmanship and heritage. We aim to continue Versace’s legacy celebrating and re-interpreting its bold and timeless aesthetic; at the same time, we will provide it with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships. Our organisation is ready and well positioned to write a new page in Versace’s history, drawing on the Group’s values while continuing to execute with confidence and rigorous focus” Prada Group chairman and executive director Patrizio Bertelli said in a statement.

Versace’s revenue dropping 15 per cent to $193 million in the third quarter of fiscal 2025, as Capri group revenue fell 11.6 per cent.