Prada, Versace to challenge French players

Prada, the Italian fashion major, has bought fellow-Italian brand Versace for $1.38 billion. Versace will retain its identity and it is expected that under Prada, it will gain much better prominence and market share.

The two big names of Italian fashion, it is hoped, will give a boost to Italian fashion in the market, and pose a challenge to French fashion houses. Many of the French fashion majors had acquired Italian fashion icons like Gucci to strengthen their hold in the market.

The coming together of Prada and Versace is seen as a counter to the world dominance of French fashion. Donatella Versace, who had managed Versace and spread its wings after her brother Gianni and founder of Versace, was murdered in Florida in 1997, had stepped down before the sale as the chief designer of Versace.

She will now function as the brand manager of Versace. Between the two, Prada is a bigger player and Versace is a small player in terms of business turnover. But Versace is a big brand and that has its own market advantages.

Experts are of the view that Versace was losing ground, and its earnings in the last few quarters have been dipping. So, the Prada takeover is expected to revive its market fortunes. The debate is whether there is anything in common between the two brands.

Prada stands for minimalist aesthetics while Versace has been vivacious and its signature is recognised as baroque. The argument is that Versace would benefit from the Prada culture of disciplined variety. Would this mean that Versace would lose some of its spontaneity and colour? The strength of Versace has been that Donatella Versace had roped in celebrities to represent the Versace brand, from Jennifer Lopez to Lady Gaga, from Carla Bruni to Cindy Crawford, from Noami Campbell to Kate Moss. But it looks like that tastes and attitudes have changed and Generation Z wants something else altogether.

Patrizio Bertelli, executive director of Prada, said, “We are delighted to welcome Versace to the Prada Group. We share a strong commitment to creativity, craftsmanship, and heritage.” Donatella Versace had stepped down as creative director at Versace, and the man who has replaced her is Dario Vitale, who has built Prada’s younger brand, Miu Miu, which is seen as an edgier sibling of Prada.

Interestingly, Versace was not owned by Donatella Versace, but by Capri Holdings. Capri Holdings bought Versace for 1.85 billion euros but had to sell it as a reduced price of .125 billion euros. This was due to the fact that Versace earnings had dipped considerably. Versace’s third quarter earnings in financial 2025 fell 15 per cent to $193 million. On the other hand, Prada posted a net profit of 839 million euros, and the revenue climbed to 5.4 billion euros.

This is seen as a risky transaction for Prada by some analysts. According to Luca Solca, luxury analyst at Bernstein, “This is a risky move. Prada may be distracted from its core business, as happened with earlier acquisitions like Jill Sander and Helmut Lang.” Prada CEO Andrea Guerra recognised the risk factor. He said, “The journey will be long, and will require disciplined execution. Versace has huge potential – but evolution takes time.”

The Covid pandemic had its own impact on the fashion industry. And there is also a new-born environmental awareness. Most fashion designers now want to move away from wasteful indulgence. Recycling is the new buzzword in the fashion circles. What this means for the rolling out of new designs each Spring, Summer, Autumn and Winter shows in Milan, Paris and New York remains an open question.