The Prada Group finalized its $1.38 billion cash acquisition of Milan luxury fashion rival Versace on Dec. 2, 2025, after securing all regulatory approvals, The Associated Press (AP) reports.

Prada — known for its minimalist aesthetic and use of unconventional materials — said the 47-year-old Versace label, famed for its maximalist aesthetic and sensual silhouettes, holds “significant untapped growth potential,” per AP.

Donatella Versace, the brand’s artistic director and co-owner, celebrated the deal in an Instagram post that also honored her late brother, company founder Gianni Versace, on his birthday.

“Today is your day and the day Versace joins the Prada family. I am thinking of the smile you would have had on your face,” Versace wrote.

First announced in April 2025, the highly anticipated deal is expected to help relaunch Versace’s fortunes. Capri Holdings, which also owns Michael Kors and Jimmy Choo, bought Versace for $2 billion in 2018, notes AP. The company struggled to position the brand post-pandemic, particularly in an era dominated by “quiet luxury,” per the outlet.

Capri Holdings Chairman and CEO John D. Idol said in a statement, per Capri’s website, that proceeds from the sale will be used to repay most of the company’s debt, giving it “greater financial flexibility to both invest in our growth as well as return capital to shareholders in the future.

“We remain focused on executing our strategic initiatives across Michael Kors and Jimmy Choo to maximize the potential of our iconic brands,” Idol added. “Looking ahead, we believe we are on track to stabilize our business this year while establishing a solid foundation for a return to growth in fiscal 2027.”

Prada heir Lorenzo Bertelli will oversee Versace’s next chapter as executive chairman, alongside his roles as the group’s marketing director and sustainability chief, according to AP.

Bertelli is the son of co-creative director Miuccia Prada and longtime Prada Group chairman Patrizio Bertelli. He has said he does not plan to make any immediate executive changes at Versace, per the outlet.

Versace accounted for 20% of Capri Holdings’ 2024 revenue of 5.2 billion euros, AP reports. This is equivalent to about $6 billion USD.

“I would like to express my gratitude to the entire Versace team for their dedication and contributions,” Idol added in his company statement. “In particular I would like to recognize Donatella Versace, Dario Vitale and Emmanuel Gintzburger for their outstanding leadership and commitment to the brand’s evolution.”

He concluded, “I wish the Versace team continued success in the future, and believe Prada is the ideal partner to guide this celebrated luxury house into its next era of growth.”