Dear BoF Community,
On Tuesday, Prada reported its 2024 results, with net revenues up 18 percent for the year ended December 31, beating market expectations by 2 percent. Sales at Miu Miu — once seen as Prada’s secondary, “little sister” brand — soared by 83 percent, with more than €1.3 billion in net sales. The group also improved profitability, expanding its EBIT margin to 23.6 percent, in line with analyst forecasts.
That this strong performance was delivered amid a challenging luxury market is even more impressive, reflecting the ongoing professionalisation of the group under the leadership of CEO, Andrea Guerra, as well as the consistent creative strength of Miuccia Prada and Raf Simons, her co-creative director at the Prada brand, which has now managed to transform its fashion authority into business success.
Things couldn’t have been more different just a few years ago. While Prada was highly respected by fashion insiders for its creativity, its business performance lagged the wider luxury sector, growing net sales at only 3 percent between 2017 and 2018. With EBIT margins of 10 percent, Prada lagged the big French groups LVMH and Kering, while the Miu Miu brand was sub-scale and did not have a clear and distinctive market positioning versus Prada.
Since then, the business has gone through a significant overhaul that has made it the envy of the industry. Smart succession planning with the arrival of Raf Simons and Lorenzo Bertelli, son of Mrs Prada and her husband Patrizio Bertelli, helped the market to believe in the long-term future of the brand. Since Guerra’s arrival in 2023, he has built trusted relationships with the brand’s owners and also helped to bring strategic and operational discipline to the business.
Could Prada Group now bring the same creative and commercial magic to Versace?
One of the truly untapped icons of the Italian luxury sector, Versace has been part of Capri Holdings since 2018 when the American group acquired the business for €1.8 billion (about US$2.1 billion on the date of the announcement) with the stated goal of growing the business from $850 million to $2 billion in annual sales.
But seven years later, Capri is reeling after its proposed merger with Tapestry was blocked by the US Federal Trade Commission last year, and Versace has just barely breached the $1 billion revenue mark, having reported a contraction in revenue in fiscal 2024. Capri has reportedly been trying to sell Versace and Prada is in pole position to acquire the brand, having entered a period of exclusive due diligence on the business at an agreed price tag of €1.5 billion (about $1.6 billion), according to Bloomberg.
With so much going right at Prada, why would the group want to add a troubled brand into the mix?
For one, an acquisition could help to drive growth, adding about $1 billion in annual revenues to the Prada Group, providing further scale to compete with the big luxury groups. Versace’s core maximalist aesthetic with its Medusa logo and iconic prints is complementary to that of minimalist Prada and youthful Miu Miu, so the brands would not compete with each other.
But Prada has tried and failed to acquire and scale brands before. In 1999, the group went on a buying spree, buying controlling stakes in Jil Sander and Helmut Lang, only to divest of these businesses later when they failed to scale.
These acquisitions turned out to be premature because Prada’s own house wasn’t in order. The thinking now is that the group has a more scalable infrastructure and platform upon which to scale other brands. It could lend its operational expertise in manufacturing, marketing and retail to turn Versace around, just like it has done for Prada and Miu Miu.
However, a Versace acquisition would still be very risky business for Prada. While Miu Miu is a homegrown brand that shares a designer with the Prada brand, Versace is a brand from the outside with its own particularities and idiosyncrasies, making a successful post-merger integration and business turnaround much more challenging.
Revenue for Versace in the most recent quarter of fiscal 2025 was $193 million, down 15 percent year-on-year and registering an operating loss of $21 million. Plus, much of Versace’s current revenue mix is not from high-quality sources like direct retail, and instead comes from off-price channels and licensing (in denim, eyewear, fragrances, jewellery, watches and home furnishings) estimated to do $2 billion in retail revenue.
To further complicate things, creative director Donatella Versace’s contract with Capri is said to expire imminently, though sources have told BoF that Dario Vitale who formerly worked as the right-hand to Miuccia Prada at Miu Miu, is taking on a senior design role at Versace, which could be a plus.
But Prada’s time, attention and money might derive a better return from focusing on further growing its own brands, especially Miu Miu. Much of the recent growth that Prada Group has registered has come while keeping the number of stores steady. There is now an opportunity to upgrade existing stores and grow the retail footprint while other brands in the industry are scaling back. Now might be the time to secure some top locations.
In the end, the viability of any deal will depend on the price Prada can secure for Versace. Just like buying a home that requires a serious upgrade, if Prada can get a really good deal then it may be worth the risk to take the time to renovate Versace. But given all the uncertainty, €1.5 billion sounds like too high a price to pay.
Catch up on all of our reports from Paris Fashion Week by Angelo Flaccavento and Tim Blanks, including today’s review of Sarah Burton’s Givenchy, as well as Haider Ackermann’s debut for Tom Ford, and read my top picks from all of our analysis and reporting from the week gone by.
Imran Amed
Founder and Editor-in-Chief
Here are my other top picks from our analysis on fashion, luxury and beauty:
1. With Trump’s Tariffs, It’s the Uncertainty That Stings the Most. The new tariffs and constant reversals have knocked global businesses off balance and left them straining to adjust to a mercurial new reality.
2. Ackermann and Ford: A Deliciously Dangerous Liaison. Haider Ackermann talks in-depth to Tim Blanks about his debut for Tom Ford and the subtle sensuality behind the brand’s new direction.
3. Sarah Burton’s Givenchy Debut: First Principles Take Flight. Nearly 75 years after Hubert de Givenchy showed his first collection in Paris, Tim Blanks talks in-depth to Burton about her aim to restore the house’s fortunes by going right back to the beginning.
4. Paris’ Printemps Knows What’s Missing From American Retail. The French department store chain will open its debut US outpost in Manhattan’s Financial District this month, focusing on food and beverage offerings as much as clothes. ‘We want people to hang out and be lost a little here,’ CEO Jean-Marc Bellaiche said. Will it be enough to survive New York’s competitive multi-brand landscape?
5. ‘Buy Canadian’ Becomes a Beauty Rallying Cry as Trump’s Tariffs Loom. Canada’s export-driven beauty startup scene is responding to the threat of tariffs with a newfound product patriotism.
This Weekend on The BoF Podcast
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Born in Sardinia on a sailing boat to self-described “adventurous” parents, Francesco Risso grew up in an environment that fostered independence, spontaneity and a deep need to create. After formative years at Polimoda, FIT and Central Saint Martins — where he studied under the late Louise Wilson — he joined Prada, learning firsthand how to fuse conceptual exploration with a product that resonates in everyday life.
Now at Marni, Risso continues to embrace a method he likens to an artist’s studio, championing bold experimentation and surrounding himself with collaborators who push each other to new heights of creativity.
“Creativity is … in the way we give love to the things that we make and then we give to people. I feel I don’t see so much of that love around,” says Risso. “We have to inject into products a strong and beautiful sense of making. That requires craft, it requires skills, it requires a lot of fatigue, it requires discipline.”
Risso joins BoF founder and CEO Imran Amed to explore how his unconventional childhood shaped his creative approach, why discipline and craft remain vital to fashion, and how meaningful collaboration can expand the boundaries of what’s possible.