Prada To Buy Versace 👗

Hey there! 👋

Prada has just signed a €1.25 billion ($1.38 billion) deal to acquire Italian fashion rival Versace from US-based Capri Holdings. This will be one of the biggest luxury fashion deals of the year.

Let’s dive into what’s happening and how law firms could be affected.

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What’s the deal? 🤝

• Prada is acquiring Versace for €1.25 billion from Capri Holdings, which also owns Michael Kors and Jimmy Choo.

• The deal includes taking on Versace’s debt, which will be funded through €1.5 billion of new debt raised by Prada.

• Donatella Versace, who stepped down as chief creative officer in March 2025, has supported the deal and remains chief brand ambassador.

Why this acquisition? 🤔

• Competition: As you know, the luxury market is dominated by French conglomerates like LVMH and Kering. By acquiring Versace, Prada is building a stronger Italian alternative that can better compete globally.

• Diversifying the portfolio: Versace’s baroque, maximalist aesthetic contrasts with Prada’s minimalism. And that’s the point! Prada’s CEO, Andrea Guerra said the deal “adds a new dimension” to the group. This introduces new customers, markets and styles. 

• Timing: Versace has been struggling financially, reporting losses and a drop in revenue from $1B in 2024 to $810M this year. That made it a great target for acquisition at a discount. Capri Holdings initially bought it for $2.1B in 2018.

What could go wrong? 🚧

🌀 Prada’s Acquisition History Is… Mixed

• In the late ’90s, Prada went on an acquisition spree (Jil Sander, Helmut Lang) and later sold both brands after disappointing results. This time around, Prada will need to prove it can integrate Versace more successfully.

💸 Funding Through Debt

• Raising €1.5B to fund the deal puts pressure on Prada’s financials, especially during an uncertain global economy.

🎨 Brand Identity Conflicts

• Versace is bold, flashy, and glamorous.

• Prada is cerebral and minimalist.

• Keeping Versace’s DNA intact without clashing with Prada’s own identity will be a careful balancing act.

How could a law firm be involved? ⚖️

Due diligence - Before finalising the acquisition, lawyers will conduct a thorough examination of Versace's financial records, contracts, intellectual property rights, and any ongoing or potential legal issues. This ensures Prada is aware of any risks associated with the acquisition.

Contracts - Lawyers from both companies may collaborate to draft and negotiate the terms of the acquisition agreement. This includes outlining the purchase price, payment structure, representations and warranties, indemnities, and any post-closing obligations.

Intellectual Property - Versace’s Medusa head and iconic design trademarks are some of its most valuable assets. Intellectual property lawyers will ensure all intellectual property rights are properly transferred and that there are no infringements or disputes that could affect the brands' reputations or market positions.

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I hope you enjoyed this article. See you next week! 👋

Written by Chirag Morar