Global luxury fashion group Capri has agreed to divest the Versace brand to Italian fashion group Prada for $1.38bn in cash.
The agreement is contingent on regulatory approvals and standard closing conditions, with the expectation of completion in the latter half of 2025.
The development follows a January 2025 report by Il Sole 24 Ore indicating Prada's interest in acquiring the fashion house.
Capri, which also manages the Michael Kors and Jimmy Choo brands, initially acquired Versace in 2018 for $2.12bn.
Established in Milan in 1978, Versace is recognised as a premier global fashion design house.
The brand has broadened its scope, branching out from its haute couture origins to encompass the creation, production, distribution and sale of an extensive range of products including apparel, jewellery, accessories, eyewear, watches, footwear, fragrances and home decor items.
Versace's international distribution network spans its own boutiques, online platforms, department stores and speciality retailers.
In the third quarter of the fiscal year 2025, the brand reported revenues of $193m - a 15% decrease from the previous year on both reported and constant currency bases.
Retail sales for the brand experienced a mid-teens percentage drop while wholesale revenues also saw a double-digit decline.
The divestiture is anticipated to fortify Capri's financial position and accelerate strategic investments focused on Michael Kors. It is also projected to enhance value for shareholders.
Proceeds from this transaction will be channelled towards Capri's capital allocation strategy which includes business investments, debt reduction and potential future stock buybacks.
Capri Holdings Limited chairman and CEO John Idol stated: “Over the last six years, we have made tremendous progress in repositioning the brand to place greater emphasis on its luxury heritage and exceptional craftsmanship. Through elevated product, marketing and store enhancements, the brand is now well positioned for sustainable long-term growth. We are confident that Prada Group is the perfect company to further guide Versace into its next era of growth and success.
“This transaction reflects our commitment to increase shareholder value, strengthen our balance sheet and power the future growth of Michael Kors and Jimmy Choo. We will continue to execute on the strategic initiatives shared at our recent Investor Day and remain confident in the long-term growth potential of Michael Kors and Jimmy Choo.”
Under Prada Group's stewardship, Versace will retain its distinctive creative essence and cultural authenticity while leveraging Prada's robust platform, encompassing industrial capabilities, retail prowess and operational acumen.
Prada Group chairman and executive director Patrizio Bertelli stated: “We aim to continue Versace’s legacy celebrating and re-interpreting its bold and timeless aesthetic; at the same time, we will provide it with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships. Our organisation is ready and well-positioned to write a new page in Versace’s history, drawing on the group’s values while continuing to execute with confidence and rigorous focus.”
