The Prada Group has finalized its acquisition of the Milan-based fashion house Versace in a cash deal valued at $1.375 billion. This merger brings together Versace, known for its bold and sexy designs, with Prada's distinctive "ugly chic" style and Miu Miu's youthful aesthetic. The deal is anticipated to revitalize Versace's brand image, which has struggled in the post-pandemic market while under the ownership of Capri Holdings, a U.S. luxury group. Prada announced the completion of the acquisition after receiving all necessary regulatory approvals. Capri Holdings, which also owns Michael Kors and Jimmy Choo, indicated that the proceeds from the sale would be used to reduce its debt. Donatella Versace expressed her enthusiasm for the deal in an Instagram post, coinciding with the birthday of her late brother, Gianni Versace, the brand's founder. "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," she wrote, sharing a nostalgic photo of Gianni Versace with Miuccia Prada from 1996. Lorenzo Bertelli, the son of Miuccia Prada and Patrizio Bertelli, will lead Versace's next chapter as executive chairman. He also serves as the group's marketing director and sustainability chief. Bertelli has stated that he does not plan to implement immediate changes at Versace, although he acknowledged that the brand has been underperforming in the competitive fashion market. Prada has highlighted the potential for significant growth within the 47-year-old Versace brand. Luca Solca, a luxury sector analyst, noted that the merger combines Prada's minimalist approach with Versace's maximalist style, suggesting that the two brands do not directly compete for the same customer base. "Versace is long past its heyday," Solca remarked. "The challenge and the opportunity is to make it relevant again. They are going to have to invent something which is going to make the brand attractive, desirable, and interesting again." Versace is already undergoing a creative transformation under new designer Dario Vitale, who showcased his first collection during Milan Fashion Week in September. Although the collection received mixed reviews, it was praised by buyers for its vibrant, 1980s-inspired designs. Previously, Capri Holdings acquired Versace for $2 billion in 2018 but faced challenges in positioning the brand amid a trend toward "quiet luxury." Capri Holdings chairman John D. Idol stated that "Prada is the ideal partner to guide this celebrated luxury house into its next era of growth." Versace accounted for 20% of Capri Holdings' projected revenue of 5.2 billion euros for 2024. In contrast, Prada expects Versace to contribute 13% to its pro-forma revenues, with Miu Miu at 22% and Prada itself at 64%. The Prada Group, which also includes Church's footwear, reported a 17% increase in revenues to 5.4 billion euros last year. The group is now preparing to integrate Versace into its Italian manufacturing system, emphasizing the shared expertise in producing luxury goods. "Making a bag for one brand or another, the know-how is the same," Bertelli explained during a recent visit to the Prada leather goods factory in Scandicci, Italy. The factory currently produces bags for both Prada and Miu Miu and will soon add Versace to its lineup. Prada has invested significantly in its supply chain, committing 60 million euros this year to enhance production capabilities, including a new leather goods factory near Siena and a knitwear factory near Perugia. This investment follows a total of 200 million euros allocated from 2019 to 2024, aimed at expanding its manufacturing footprint and training new artisans in Italy.