A woman next to a Prada window, in Milan / AFP
Prada Group announced yesterday that it has officially bought Milan fashion rival Versace, in a deal worth €1.25 billion (about $1.4 billion) that puts the fashion house known for its provocative designs under one roof with Prada’s “ugly chic” aesthetic and Miu Miu’s youthful appeal.
It must be said that “Ugly Chic” is a fashion style that combines aesthetically dissonant or unexpected elements to create an interesting and intellectual, although not traditionally attractive, look.
The anticipated deal is expected to revive Versace’s fortunes after a lackluster post-pandemic performance as part of the American luxury holding group Capri. Prada said in a one-line statement that the acquisition has been completed after obtaining all regulatory approvals. Prada heir Lorenzo Bertelli will lead Versace’s next phase as CEO, in addition to his roles as group marketing director and chief sustainability officer.
The son of co-creative director Miuccia Prada and veteran Prada Group chairman Patrizio Bertelli said he does not expect quick executive changes at Versace. But Bertelli pointed out that the company, which is among the 10 most recognizable brands in the world, was underperforming its potential in the market. Prada stressed that the Versace brand, which dates back 47 years, offers “significant untapped growth potential.”
Versace has embarked on a creative relaunch under new designer Dario Vitale, who presented his first collection during Milan Fashion Week in September. He was previously chief designer at Miu Miu, but his move to Versace was unrelated to the Prada deal, executives said. Capri Holdings, which owns Michael Kors and Jimmy Choo, paid $2 billion for Versace in 2018, but has struggled to position Versace’s bold image in the recent era of “quiet luxury.”
Business for the future
Versace represents 20% of Capri Holding’s €5.2 billion revenue in 2024. An analyst presentation on the Prada deal indicated that Versace would represent 13% of pro forma revenue (an estimate of the company’s future revenue, taken from historical data and sales forecasts) of the Prada Group, with Miu Miu coming to 22% and Prada 64%. The Prada Group, which also includes Church Shoes, reported a 17% increase in revenue to 5.4 billion euros last year.
The Prada Group has already begun preparations to integrate rival Versace into its Italian manufacturing system, a source of pride for the group. “The knowledge is the same when making a bag for one brand or another,” Bertelli told reporters last week at the group’s leather goods factory in Scandicci, which already makes bags for Prada, Miu Miu, and will soon add Versace.
The Prada Group has invested €60 million in its supply chain this year, including a new leather goods factory near Siena, a new knitwear factory near Perugia, as well as increasing production at its UK shoe factory Church and expanding another Tuscan factory. This is in addition to 200 million euros in investments from 2019 to 2024.
Prada’s efforts include an academy that has trained some 570 new craftsmen over the past 25 years in an in-house training academy operating in the regions of Tuscany, Marche, Veneto and Umbria. Last year, Prada hired 70% of the 120 craftsmen who trained at the academy. The number of trainees increased by 28% to 152 this year.