The Italian luxury brand Versace has been sold to its competitor, Prada, for a total of $1.375 billion (approximately 2 trillion KRW). On the 2nd (local time), Prada announced in a statement that it had received all regulatory approvals for the acquisition of Versace and completed the transaction, according to the AP.
The acquisition involved a cash transaction to purchase 100% of Versace’s shares from its parent company, American Capri Holdings. Capri Holdings owns fashion brands Michael Kors and Jimmy Choo. The company stated that the proceeds from the sale of Versace would be used for debt repayment.
Founded in 1978 by Gianni Versace in Milan, Italy, the fashion brand Versace is known for using the mythological creature Medusa as its brand symbol, characterized by its bold and vibrant designs. Although Versace was sold to Capri Holdings in 2018, it struggled to recover from poor performance during the COVID-19 pandemic.
Prada, known for its minimalist style, aims to diversify its customer base by acquiring Versace and to compete with French luxury groups like LVMH (Louis Vuitton Moët Hennessy) and Kering. Lorenzo Bertelli, the successor of the Prada Group, holds the position of Group Marketing Chief and Sustainability Officer and is set to become the Executive Chairman leading Versace’s leap forward. He is the son of Prada’s founder Miuccia Prada.
Though Bertelli stated that there would not be abrupt management changes at Versace, he indicated intentions for substantial innovation, acknowledging the brand’s prolonged underperformance in the market.
Luca Solca, an analyst at Bernstein Consulting, commented on the deal, describing it as a combination of the minimalism of Prada and the maximalism of Versace, implying that the two brands do not compete for the same customer base. He noted, “Versace is well past its heyday,” and the challenge and opportunity lie in revitalizing the brand to fit the current times.
(Photo = Yonhap News)