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In a blockbuster move poised to send ripples through the haute couture universe, Capri Holdings Ltd. has struck a deal to sell Versace—the flamboyant crown jewel of Italian fashion—to Prada Group for a staggering €1.25 billion ($1.37 billion). The deal, announced Thursday, marks a seismic shift in the luxury fashion landscape and positions Prada for an even fiercer role on the global stage.

Capri Tightens Focus, Prada Expands Empire

Capri Holdings, the parent company of Michael Kors and Jimmy Choo, said the sale would sharpen its strategic vision and strengthen its financial foundation.

“Versace is an iconic Italian fashion house founded 46 years ago by Gianni Versace and further developed under the creative vision of Donatella Versace,” said John Idol, chairman and CEO of Capri Holdings. “Over the last six years, we’ve repositioned the brand to highlight its heritage and craftsmanship. Now, it's poised for long-term success under Prada.”

The proceeds from the deal, according to Capri’s statement, will be channeled into business investments, debt reduction, and share repurchases—a tactical shift intended to boost shareholder value and turbocharge growth for Michael Kors and Jimmy Choo.

Versace: The Crown Jewel With Untapped Potential

Founded in Milan in 1978, Versace has long been synonymous with bold glamour, audacious designs, and runway theatrics. Under Prada’s stewardship, the label will retain its creative DNA while tapping into the group’s industrial capabilities, global retail network, and operational prowess.

In its own Thursday statement, Prada called Versace a “strongly complementary addition” to its portfolio, one that brings fresh dimensions to its vision of fashion as both legacy and innovation.

“The acquisition of Versace marks another step in the evolutionary journey of our group,” said Andrea Guerra, CEO of Prada Group. “Versace has huge potential. This journey will be long and requires disciplined execution and patience. The evolution of a brand always needs time and constant focus.”

Powerhouse Law Firms Orchestrate High-Fashion Merger

Legal juggernauts were at the heart of the deal. Skadden, Arps, Slate, Meagher & Flom LLP guided Prada through the transaction, with a team led by partners Cristina Tomassini, Sandro de Bernardini, and Peter Serating.

On the other side, Wachtell, Lipton, Rosen & Katz advised Capri, with corporate partners Joshua Cammaker and Mark Stagliano taking the lead, joined by Damian Didden on antitrust, Jeannemarie O'Brien on executive compensation, Emily Johnson on finance, and tax experts Deborah Paul and Rachel Reisberg.

A Luxury Saga That’s Far From Over

Prada plans to finance the acquisition with €1.5 billion in new debt, signaling its bold confidence in the long-term value of the Versace brand. Analysts say the merger could elevate Prada’s global profile to rival French titans like LVMH and Kering, while reshaping the competitive dynamics of the luxury fashion industry.

As the fashion world watches with bated breath, the house that Gianni built begins a new chapter—rooted in Italian flair, propelled by Prada’s powerhouse infrastructure, and primed for a rebirth on a global scale.