Luxury fashion firm Prada Group reached an agreement with Capri Holdings to acquire designer brand Versace in a deal valued at $1.38 billion, Prada announced Thursday, after earlier reports indicated the two Italian fashion staples struggled to close the transaction as President Donald Trump’s tariffs roiled markets.
Key Takeaways
- Prada will fund its acquisition of Versace, approved by both companies’ boards, with about $1.6 billion in new debt after borrowing more than $1 billion, Prada announced Thursday.
- Prada and Versace expect the transaction to close in the second half of the year, pending approval by regulators.
- A deal between Prada and Versace was nearly derailed after Trump announced reciprocal tariffs on U.S. trade partners, requiring companies to start relying on higher costs to source raw materials as fears of a recession loomed, the Wall Street Journal reported.
- The value of Versace’s parent company, the New York-based Capri Holdings, fell to as low as $1.5 billion as Trump’s tariffs led to a historic selloff in the U.S. stock market, and Prada had negotiated the price to buy Versace down from $1.6 billion to just under $1.4 billion, people with direct knowledge of the talks told the Financial Times.
Tangent
Capri has tried to sell its business for years: A $8.5 billion deal to sell itself to Coach owner Tapestry fell through in 2024 after the Federal Trade Commission successfully argued the transaction would “substantially lessen competition” among luxury handbag makers.
Key Background
Versace, founded in 1978 by Gianni Versace, was acquired by Capri Holdings—then known as Michael Kors—for $2.1 billion in 2018. That deal was reached under Donatella Versace, who succeeded her brother Gianni as the company’s chief creative officer after he died in 1997.
Speculation of Versace’s latest acquisition efforts has swirled in recent months, including after Donatella Versace, 69, announced she would step down from her role last month. Capri previously asked for more than $3 billion for Versace before Donatella’s absence impacted negotiations, the Financial Times reported. Capri forecast a $810 million drop in revenue in its current fiscal year, down from $1 billion in 2024.
