One hour after announcing they would buy Versace, Prada CEO Andrea Guerra and family scion Lorenzo Bertelli warned analysts not to expect a miracle overnight, even as they expressed excitement about the acquisition.
“We are very excited to be working with a brand that has a very different DNA than Prada. But I won’t talk about revolution. If you look at Miu Miu over the past few years, we have not changed things dramatically, but it has been an incredible success. We don’t need to revolutionize Versace. What we need are a few smart changes and to be patient,” insisted Lorenzo Bertelli, the eldest son of Prada designer Miuccia Prada and Patrizio Bertelli, Prada Group chairman and executive director.
Added Guerra: “This is a long-term project that means we are talking about foundations, image, positioning, creativity and our ability to develop product collections. Our goal will be sustainable revenue growth in the long term, but not in the next 18 or 24 months.”
As reported, Prada S.p.A. announced on Thursday that it had signed a definitive agreement to acquire 100% of Versace from Capri Holdings for €1.25 billion, subject to adjustments at closing. The sticker price would appear to be a good deal, considering that Capri paid €1.83 billion to buy the company from the Versace family back in 2018.
The deal also comes just three weeks after Capri announced that Donatella Versace, the sister of founder Gianni Versace, would be stepping down as the house’s creative director to become its ambassador. She has been replaced by Dario Vitale, formerly the right-hand man of Miuccia at the group’s second marque, Miu Miu, the fastest-growing high-end runway label in fashion today.
When quizzed on whether Prada was consulted about Vitale’s appointment at Versace, Bertelli replied: “When Dario gave his resignation, we tried to hold him where he was. This was his decision. We had no consultancy role, and we got no commission!”
Though, when asked if Prada was happy to find Vitale at Versace, Guerra was diplomatic: “We are very happy to welcome all the Versace team, wherever they are in the world. This is a project where we need to be warm and let everyone have the possibility to show their talent.”
Lorenzo was subsequently asked what role his mum, Miuccia—arguably the single most influential designer in fashion this past quarter century—would play at Versace.
“There is absolutely no role for Signora Prada other than the fact that she will be the biggest shareholder in the company!” chortled Lorenzo, Prada Group chief marketing officer and head of corporate social responsibility.
In terms of organization, Guerra insisted the current group setup, with verticalized brand organizations and routines, was sufficient to handle the addition of another major label like Versace.
“In the last three years, we have gone through an evolution in our organization and verticalized, in our own way, our brands. We have two brands — Prada and Miu Miu — and Church’s (shoes), and now Versace, which is another vertical asset, just like Prada and Miu Miu.”
When pressed if Prada would appoint a new executive to manage Versace, Guerra responded: “Versace is led by a CEO, and we will begin the job with him,” he said, referring to Emanuel Gintzburger, who took over at Versace in March 2022 after helming Alexander McQueen for six years.
Asked by analysts about the potential synergies envisaged by combining two legendary Italian brands, Guerra insisted the key to the future would be: “Know-how. This is a revenue project and not a cost project. It’s not a question of saving money, though obviously, there are opportunities to save on certain streams and to share efficiencies. But above all, this is a brand and revenue project.”
Though in some ways equally famous global brand names, Prada dwarfs Versace, with group revenues of €5.7 billion, compared to barely €1 billion for Versace. While in terms of profits, Prada’s group net income rose 25% last year to €839 million, while Versace barely broke even.
Moreover, the brainy, stylistic chic of Miuccia Prada is light-years away from the high-octane, in-your-face glamour of Versace.
“You don’t have to be a fashion expert to realize that the aesthetics of Prada and Versace are very different,” conceded Lorenzo.
A further divergence is that Versace is heavily dependent on royalties from licensing, unlike Prada, which has a substantial fully owned boutique network, causing concern about Versace’s distribution channels.
“Versace’s performance in the last couple of years has not been the best, but the whole industry suffered a bit. When this happens, some of the channels get a little heavy,” accepted Guerra, adding that in the long term, Versace needed “more balance between full price and outlets.”
He then clarified that Versace has essentially two key licenses — fragrances and eyewear with Luxottica. “Which I know very well, as I started myself in Luxottica in 2003,” he laughed, prompting much chuckling.
But again, when pressed whether the house would maintain the more populist Versace Jeans license, he responded: “I cannot share anything about that.”
What no one asked was the $64,000 question: Why does Prada believe this expansion will work better than its previous experience?
One should recall that back in 1999, Prada joined forces with LVMH to buy Fendi in an $850 million deal — part of an acquisition spree by Patrizio Bertelli that included expensively acquiring Germany’s best homegrown designer, Jil Sander, and Helmut Lang of Austria — at the time the hottest designer on the planet.
But it all sort of ended in tears. Prada sold its stake in Fendi to LVMH and then fell out with both Jil and Helmut, ditching both brands in 2006 after suffering considerable losses. That seemingly ended Bertelli’s plans to build a bona fide Italian-owned luxury group. His son, Lorenzo, would appear to have other ideas.
Copyright © 2025 FashionNetwork.com All rights reserved.
