Donatella Versace Steps Down Amid Talk of Prada Acquisition

Donatella Versace is stepping down as Chief Creative Officer of Versace after nearly three decades, fueling speculation of a sale to rival fashion house Prada (OTC:PRDSY). The announcement by Capri Holdings (NYSE:CPRI) comes as reports suggest Prada is close to acquiring Versace for approximately 1.5 billion euros ($1.6 billion).

Dario Vitale, formerly Design and Image Director at Miu Miu, a subsidiary of Prada, will take over Donatella’s role effective April 1. Meanwhile, Donatella, 69, will transition into the position of Chief Brand Ambassador. Reflecting on her tenure, she stated, “It has been the greatest honor to carry on my brother Gianni’s legacy. He was the true genius, but I hope I have some of his spirit and tenacity.”

The potential acquisition signals a major shift in the luxury fashion landscape, particularly as Versace has struggled to maintain its market position. Analyst David Swartz noted that Versace has lost relevance compared to other European luxury brands. “The appointment of Vitale could be linked to the sale, making it even more likely,” he added.

Prada is also rumored to be eyeing another Capri brand, Jimmy Choo, as part of its expansion strategy. Versace, known for its bold and provocative aesthetic, contrasts with Miu Miu’s more refined and playful designs. Federico Giglio, CEO of Giglio.com, highlighted the difference in their customer bases, adding that a skilled designer can adapt while respecting a brand’s identity.

Versace reported a 6.6% revenue drop to $1.03 billion for the fiscal year ending March 2024, with further declines expected before a projected rebound in 2027. Originally founded in 1978 by Gianni Versace, the brand was acquired by Capri Holdings in 2018 for 1.8 billion euros ($1.9 billion).