The acquisition would be a defining moment for Italy’s luxury sector, reversing a decades-long trend of homegrown fashion houses being absorbed by foreign conglomerates. It would position Prada as a stronger competitor to LVMH and Kering, creating an Italian luxury powerhouse capable of going toe-to-toe with the French giants.

Prada has spent weeks conducting due diligence, and sources indicate no major red flags have surfaced, bringing the deal closer to completion. However, the timing and valuation could still shift, and there is no guarantee negotiations will result in a final agreement. Prada declined to comment, while Capri has yet to issue a statement.

Investors are already responding. Prada’s shares surged as much as 4.1% in Hong Kong on Monday, reflecting confidence in its expansion strategy.

Acquiring Versace would bring together two of fashion’s most contrasting aesthetics—Prada’s sleek minimalism and Versace’s bold maximalism. But rather than clashing, analysts at UBS believe the brands would complement each other, minimizing overlap while expanding market reach.

Strategically, this deal makes sense for Prada. The company has been a rare standout in the current luxury slowdown, with sales soaring on the strength of Miu Miu’s resurgence. Meanwhile, Versace has struggled, reporting a 15% year-on-year revenue decline in Q3, with operating losses widening from $14m to $21m.

For Capri, the timing is significant. The company, which also owns Michael Kors, has been exploring divestment options after its failed $8.5b merger with Tapestry Inc. That collapsed deal led to a downgrade of Capri’s debt to below investment grade, making a Versace sale more likely.

If Prada secures the deal, it wouldn’t just be an acquisition—it would be a statement. At a market value of $22.5b, Prada is still a fraction of LVMH’s staggering €347.5b valuation. But this move signals a long-term ambition: to fortify its position and create a luxury empire that challenges Europe’s biggest players.

In an era where global conglomerates have long dominated high fashion, Prada’s potential takeover of Versace could mark the beginning of a new chapter—one where Italian brands reclaim their legacy on the global stage.

Source: Yahoo Finance