Prada is advancing in talks to acquire Versace from Capri Holdings in a deal reportedly valued at around €1.5 billion ($1.6 billion). The acquisition is part of Prada’s strategy to expand its luxury portfolio and improve its position in the competitive fashion industry. This follows Capri Holdings' decision to focus on revitalizing its Michael Kors brand and sell off its higher-end labels, including Versace and Jimmy Choo.

Prada’s potential acquisition of Versace could face challenges, as integrating the luxury brand into its portfolio may require substantial restructuring and could impact short-term profits.

However, Prada aims to leverage its expertise in manufacturing, marketing, and leather goods to address operational inefficiencies at Versace, with hopes of revitalizing the brand and positioning itself more competitively against industry giants like LVMH and Kering.

According to reports, a formal agreement between Prada and Capri could be reached as soon as March, although the terms are still fluid. Capri, which also owns Jimmy Choo and Michael Kors, is engaged in detailed discussions with Prada following positive initial financial assessments.

Miuccia Prada, creative head of the Italian brand, confirmed that there is strong interest from other fashion houses in acquiring Versace, but did not disclose specific names. Earlier reports revealed that Prada had been granted early access to Versace’s financial data, putting the brand in a favorable position in the bidding process.

Capri Holdings acquired Versace in 2018 for €1.83 billion, including debt.