BUSINESS

Prada’s Acquisition of Versace Fuels Hope for a True ‘Made in Italy’ Luxury Powerhouse

In a landmark move that revives Italy’s ambitions of building a homegrown luxury giant, Prada has sealed a $1.375 billion deal to acquire Versace. This acquisition brings the renowned fashion label back under Italian control after it was sold to U.S.-listed Capri Holdings (formerly Michael Kors) for $2.15 billion in 2018.

The deal signifies more than a merger — it represents a cultural and economic win for Italy’s fashion heritage. While Italy produces over half of the world’s personal luxury goods, the country has long lacked a conglomerate to rival the global scale of French giants like LVMH and Kering.

Now, Prada — Italy’s largest luxury fashion group by revenue and headquartered in Milan — is positioning itself as the nucleus of a new Italian luxury empire. Controlled by fashion icon Miuccia Prada and husband Patrizio Bertelli, the company is listed on the Hong Kong Stock Exchange and valued at around €14 billion.

The move comes under the leadership of CEO Andrea Guerra, appointed in 2023 to help transition leadership to the next generation, with Lorenzo Bertelli — the son of Prada’s founders — seen as the heir apparent.

“Prada’s ambition to become a leading Italian luxury conglomerate is exactly what many Italians have been hoping for,” said Achim Berg, fashion and luxury advisor.

Though still dwarfed by the likes of LVMH, Prada’s step toward consolidation mirrors France’s success in building global luxury houses through strategic acquisitions.

A Cultural Divide in Luxury Leadership

Italy’s approach to fashion leadership differs from its French counterparts. While French groups are known for their aggressive expansion and financial acumen, many Italian brands remain family-run and emotionally rooted.

“Our French counterparts are great financiers, but we Italians treat our companies like our children — we want to nurture and pass them on,” said Brunello Cucinelli at the 2024 Milano Fashion Global Summit.

The combined revenues of Prada, Moncler, Ermenegildo Zegna, Brunello Cucinelli, and Ferragamo still fall short of Kering’s €17 billion — even after a tough year for the French group. However, the tide may be turning.

What This Means for Italian Fashion

This isn’t Prada’s first attempt at expansion. The company previously acquired brands like Helmut Lang and Jil Sander, which Bertelli later called “strategic mistakes.” Since then, Prada has focused on organic growth and acquiring suppliers. The Versace deal marks a strategic shift — a serious play to scale.

Versace and Prada are both rooted in Milan, their headquarters just 4 kilometers apart. This geographic proximity could further fuel collaboration and synergy between the two brands.

Other Italian players are also stirring. Moncler, revived by entrepreneur Remo Ruffini in 2003, acquired Stone Island in a €1.15 billion deal in 2020. With €1.3 billion in net cash, Moncler is often linked to further acquisition speculation, though it has denied any such plans.

Meanwhile, groups like Renzo Rosso’s OTB (which owns Diesel and Jil Sander) remain active, albeit smaller in scale.

What’s Next: Eyes on Armani & Dolce & Gabbana

In the broader landscape, attention now turns to two of Italy’s biggest names still operating independently — Armani and Dolce & Gabbana. Fully family-owned and unlisted, these fashion houses could hold the key to a truly unified Italian luxury conglomerate.

With French conglomerates continuing to buy into Italian brands — including Kering’s stake in Valentino and LVMH’s investment in Moncler’s top shareholder — the competition is fierce.

Yet Prada’s bold acquisition of Versace could be the beginning of a new era — one where “Made in Italy” doesn’t just stand for quality and tradition, but for global dominance too.