Valuation Analysis of Prada’s Acquisition of Versace and Its Impact on Competitive Advantages

Based on the latest market data and transaction information, I analyze Prada’s acquisition of Versace and its impact on Prada’s valuation and competitive advantages as follows:

In December 2025, Prada Group officially completed the acquisition of Versace, with a transaction value of

(≈ €1.25 billion), representing a discount of approximately compared to the $2.1 billion Capri Holdings paid to acquire Versace in 2018[1][2]. This price equals of Versace’s projected sales for the next fiscal year ($800 million)[3].

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Metric	Versace	Prada Group
EV/Revenue	1.42x	3.21x
EV/EBITDA	137.5x	8.73x

From a valuation perspective, Prada acquired Versace at a

. Versace’s EV/Revenue multiple is only half that of Prada Group, and this discount reflects Versace’s financial difficulties in recent years—its sales are projected to drop from $1 billion to $810 million in the fiscal year ending March 2025[4].

Prada will finance the acquisition through approximately

, and will additionally invest in Versace’s brand restructuring and revival plan[5]. This financing structure may initially have a dilutive effect on Prada’s earnings per share (EPS), but it holds significant value from a long-term strategic perspective.

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Prada is known for its minimalist, restrained design aesthetics, while Versace is famous for its glamorous, exaggerated style. Former LVMH North America Chairman Pauline Brown stated: “The Bertelli family has long aspired to build an Italian version of LVMH. Acquiring Versace grows their brand portfolio to 7, a wise strategy that gives Prada Group a broader and deeper portfolio of Italian brands”[6].

Versace’s global retail network is distributed as follows:

[4]. This layout will significantly strengthen Prada’s presence in the American and Asia-Pacific markets, particularly in emerging markets such as the Middle East and Southeast Asia where Versace still holds brand influence.

This acquisition marks the birth of

, enabling Prada to compete head-on with French groups LVMH and Kering. The value of Prada Group’s brand portfolio has reached , including Prada, Miu Miu, Church’s, Car Shoe, Marchesi 1824 and Luna Rossa[6].

Prada plans to integrate Versace into its Italian production system. Prada Group has invested a total of €200 million in its supply chain, and has established an internal training academy that has trained approximately 570 artisans in regions such as Tuscany and Marche over the past 25 years[7]. This vertical integration capability can provide strong manufacturing support for Versace while achieving cost optimization.

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Prada Group demonstrates

, which provide a solid foundation for integrating Versace:

• 2024 total revenue of
  €5.4 billion
  , representing a
  17% year-over-year increase
• 9% sales growth
  in the first 9 months of 2025, reaching €4 billion
• 19 consecutive quarters of growth
  , standing out against the overall slowdown in the luxury goods industry[8]
• Miu Miu’s 2024 retail sales grew
  93.2% year-over-year
  , becoming an important growth driver for the group[6]

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1. Brand Positioning Integration Risk
   : Achieving synergy with Prada’s minimalist aesthetics while preserving Versace’s unique brand DNA requires a carefully managed creative strategy
2. Short-Term Financial Pressure
   : $1.6 billion in debt financing will increase financial leverage, which may affect credit ratings in the initial stage
3. Market Cycle Risk
   : Fluctuations in demand in the Chinese and American markets, as well as potential European commodity tariffs, may impact integration results
4. Versace’s Revival Task
   : Significant resources need to be invested in creative restructuring, digital upgrading, and store network optimization

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Prada’s acquisition of Versace is a

. Acquiring a luxury brand with deep Italian heritage at a 34% discount, while gaining brand portfolio complementarity, geographic footprint expansion, and the ability to compete with LVMH/Kering. Barclays participated in the transaction as Versace’s financial advisor, and its overweight rating on Prada reflects recognition of this strategic initiative. Although short-term integration challenges and financial pressure exist, in the long term, this acquisition significantly enhances Prada’s competitive position in the global luxury goods market, laying a solid foundation for building its Italian domestic luxury empire.

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[1] MergerSight - “Prada’s $1.38bn Acquisition of Versace” (https://www.mergersight.com/post/prada-s-1-38bn-acquisition-of-versace)

[2] Yahoo Finance - “Here’s Prada’s luxury empire after its $1.38 billion Versace acquisition” (https://finance.yahoo.com/news/heres-pradas-luxury-empire-after-its-138-billion-versace-acquisition-165613681.html)

[3] Sina Finance - “Official Announcement! Prada Group Acquires Versace for €1.25 Billion” (https://finance.sina.com.cn/stock/relnews/hk/2025-04-11/doc-inesuhhc2709186.shtml)

[4] MergerSight - Deal Valuation Analysis (https://www.mergersight.com/post/prada-s-1-38bn-acquisition-of-versace)

[5] Hypebeast - “Prada Group Nears Successful Acquisition of Versace” (https://hypebeast.com/zh/2025/3/prada-evaluates-versace-bid)

[6] Yahoo Finance - Analyst Commentary (https://finance.yahoo.com/news/heres-pradas-luxury-empire-after-its-138-billion-versace-acquisition-165613681.html)

[7] Sina Finance - “Prada Announces Acquisition of Fashion Competitor Versace” (https://finance.sina.com.cn/stock/usstock/c/2025-12-02/doc-infzmiey2125889.shtml)

[8] Business of Fashion - “Prada Posts Industry-Beating Growth Ahead of Versace Acquisition” (https://www.businessoffashion.com/news/luxury/prada-group-sales-rise-13-percent/)