Prada S.p.A. on Thursday announced that it has entered into a definitive agreement to acquire 100% of Versace from Capri Holdings, completing a negotiation that had lasted just a few months.

The cash consideration, based on an Enterprise Value of €1.25 billion, is subject to adjustments at closing. However, the sticker price is also significantly less than the €1.83 billion Capri paid to buy Versace back in 2018.

Founded in 1978 in Milan, Versace is one of the leading international fashion design houses and epitome of Italian luxury worldwide. Building on a remarkable brand awareness, Versace stands as a distinctive asset in the luxury landscape. Deeply rooted in the history of fashion, the brand displays strong potential to read contemporaneity and marked sensibility in capturing and anticipating the spirit of today’s and future society, Prada stressed in a release.

“We are delighted to welcome Versace to the Prada Group and to build a new chapter for a brand with which we share a strong commitment to creativity, craftmanship 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 organization 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,” said Patrizio Bertelli, Prada Group Chairman and Executive Director.

The deal comes three weeks after Capri announced that Donatella Versace, sister of founder Gianni Versace, had stepped down as the house’s creative director to become its ambassador. She was replaced by Dario Vitale, formerly the design director of Miu Miu, the fastest growing label in the Prada group.

With its highly recognizable aesthetic, the brand constitutes a strongly complementary addition to the Prada Group’s portfolio and displays significant untapped growth potential leveraging multiple value creation levers, Prada noted.

Within the Prada Group, Versace will maintain its creative DNA and cultural authenticity, while benefitting from the full strength of the Group’s consolidated platform, including industrial capabilities, retail execution and operational expertise.

“The acquisition of Versace marks another step in the evolutionary journey of our Group, adding a new dimension, different and complementary. The Group’s infrastructure is strong, we have verticalized our brands’ organizations and reinforced our routines and processes. We feel ready to open this new chapter. Versace has huge potential. The journey will be long and will require disciplined execution and patience. The evolution of a brand always needs time and constant focus. I would like to thank Capri Holdings for having preserved and enhanced the heritage of this wonderful brand. Notwithstanding the sector uncertainties, we look at the future with confidence, focused on a long-term strategic vision,” added Andrea Guerra, Group Chief Executive Officer.

Author Credits- Godfrey Deeny, FASHION NETWORK