One thing was clear with Prada’s recent and newsworthy acquisition of Versace from Capri Holdings: Italian luxury is coming together to bolster its position in the global luxury market.
With Versace coming back home to Italian ownership, Prada hopes to gain access to a broader range of consumers, capturing both the understated and the extravagant fashion markets Versace is known for. Additionally, the retailer stands to benefit from Versace's strong presence in North America—accounting for close to 31% of revenue for Capri Holdings in 2025’s third fiscal quarter .
“Versace brings boldness and cultural energy; Prada offers refinement and modern minimalism,” Jhara Valentini, founder of Valentini Media Group, a consulting firm that works with a number of luxury brands, told Retail Brew via email. “Together, they allow the group to engage different consumer mindsets and aesthetic preferences—without compromising what makes each brand distinctive.
“It’s likely that both brands will benefit from shared infrastructure—across media, data, digital tools, and supply chain—while maintaining creative independence,” she added.
Darpan Seth, CEO of Nextuple, an omnichannel order management advisory and technology firm, agreed, adding that while Prada will likely gain a brand with global recognition, Versace will benefit from Prada’s financial strength and operational rigor.
Together, this could be considered Italy’s answer to French luxury bigwigs LVMH and Kering. For Versace, however, this transition has come with a set of speedbumps. Under Capri Holdings, its revenues dipped 15% declining to $193 million in the third quarter of its fiscal year, with operating losses widening from $14 million to $21 million.
For Capri Holdings, which first purchased the Italian luxury brand in 2019 with high hopes and its own agenda to rival European luxury conglomerates, the retailer eventually became more of a liability than an asset as operational costs grew. Prada, however, saw an opportunity to consolidate and strategically recalibrate, placing broader confidence in the “Made in Italy” movement.
The final nail in the coffin, though, may have been with the new tariffs from the Trump administration, which seemed to have played a major role in helping Prada acquire Versace at a much lower price than it was hoping for. Meanwhile, Capri, which originally bought the company for $2.1 billion, essentially sold it at a loss.
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“The timing of the deal suggests tariffs and macroeconomic pressures may very well have played a role—likely pushing Capri Holdings to divest Versace at a more favorable valuation,” Seth said. “Prada’s move reflects a long-term bet on growth and synergy over short-term volatility.”
Valentini added that while the deal was likely well underway before the on-again, off-again tariff saga, the uncertainty that it created around global trade gave it a push.
“It’s not that tariffs are new—but their unpredictability adds pressure for luxury groups to take more control,” she said.
But while this uncertainty may have resulted in a “bargain” deal for Prada, the underlying economic and geopolitical issues that facilitated it also spell bigger incoming problems for the rest of the luxury industry.
“Given current market turbulence, whether from tariffs or geopolitical uncertainty, we’ve seen a marked slowdown in M&A activity,” Charles Corpening, CIO and managing partner of West Lane Partners, a private equity firm focused on the middle market, told Retail Brew. “More often than not, deals are being postponed or canceled. However, this announcement shows that transactions can indeed go forward. But they’re being done at reduced valuations to compensate buyers for their willingness to move forward despite market uncertainty.”
He added that the Versace valuation is an example that it’s not just “pegged to the market noise” or the tariffs and larger concerns around a possible recession that goes hand in hand with a decline in global luxury goods sales this year.
“The combined forces of economic uncertainty and geopolitical turbulence have eroded consumer confidence,” he said. “This, along with the threat of a recession, has chilled confidence both at the boardroom level and on Main Street.”