Italian fashion giant Versace, the long-held family business known for its flashy, sexy designs and Medusa head logo, will now become part of Prada, its larger rival and polar opposite in terms of style. 

The 1.25 billion euro acquisition, announced Thursday, aims to breathe new life into Versace, whose highs and lows have included the 1997 murder of its founder, Gianni Versace, and the stewardship of the brand's legacy by his sister, Donatella. 

Here are five things to know about the Milan-based luxury brand:

Gianni Versace, stylist of stars

Born in Calabria, southern Italy, to a dressmaker mother, Gianni Versace began designing clothes at a young age and moved to fashion capital Milan when he was 25. 

In 1978, he presented his first signature collection, with his brother Santo taking care of the label's business arm.

"He was a 360-degree creator, a real artist, he had a pure creative vision on colours and materials," Stefania Saviolo, director of the luxury and fashion centre at Bocconi University, told AFP.

Versace wowed the showbiz world, dressing A-listers from Madonna to Elton John and getting 1980s supermodels like Claudia Schiffer, Naomi Campbell and Cindy Crawford to strut their stuff down the catwalk for him.

'THAT' dress

Gianni Versace's collections were colourful, sexy and over the top. His designs mixed baroque prints, animal skin motifs, bondage-style leather, slits and, especially, ultra-tight fits.

At the 1994 premiere of "Four Weddings and a Funeral", he dressed actress Liz Hurley in a famously suggestive black dress.

Made from silk and lycra, with a sharply plunging neckline and a long slit up the side, the dress was held together by several oversize golden safety pins.

The dress catapulted Hurley, then romantically involved with actor Hugh Grant, to fame and became simply known as "THAT dress".

Death and fall

On July 15, 1997, Gianni Versace was shot dead by luxury-obsessed serial killer Andrew Cunanan as he returned to his luxury villa in Miami after buying his morning papers. 

The killing shocked the worlds of fashion and show business at a time when the brand was at its height.

Gianni's younger sister Donatella, then in charge of the lower-cost Versus line, took over as artistic director, while Santo kept control of the business side of the enterprise.

But the Versace brand's power shrank as management teams succeeded one after the other, employees were laid off and boutiques closed.

Donatella

Gianni's muse and confidante Donatella Versace had worked for 14 years at the side of her older brother, and sunk into depression after his death, going into rehab for drug addiction in 2004. 

Eternally tanned with dyed blonde hair and a penchant for plastic surgery, she was initially dismissed as a lightweight substitute for her brother. 

But with time, the younger Versace rose to the challenge, producing her own showstopping creations, such as the barely-there green chiffon jungle dress worn by Jennifer Lopez at the 2000 Grammy Awards. 

After nearly 30 years as artistic director, the 69-year-old stepped down last month, handing the reins to Dario Vitale, the former design director at Prada's Miu Miu brand. 

Donatella Versace remains Versace's brand ambassador.  

New spark

Since the US holding company Capri Holdings acquired Versace for about 1.8 billion euros in 2018, it has lost some of its luster. 

"The Versace brand has become too commercial. Prada can allow it to return to its golden age and reconnect with its luxury DNA," fashion consultant Antonio Bandini Conti told AFP. 

Prada's deeper pockets will help the brand compete in an increasingly crowded field of well-funded luxury brands, dominated by France's LVMH fashion conglomerate. 

Most recently, Versace posted $193 million in revenue for its fiscal 2025 third quarter, down 15 percent from the period a year earlier.