Prada buys Versace, taking control of maximalist label that was once its rival

One of the biggest rivalries in fashion is over, with Prada buying fellow Italian fashion house Versace in a billion-dollar deal.

The takeover, worth 1.25 billion euro ($2.2 billion), was confirmed in a chic, one-line statement.

Versace's fortunes have been waning in recent years as the nearly 50 year old brand struggles to capture consumers as it once did.

Prada, on the other hand, has found immense success, thanks in part to its more youthful label, Miu Miu — its name derived from its owner, Miuccia Prada.

In March, Donatella Versace stepped down as creative director, nearly three decades after she took up the role following the assassination of her brother and the brand's founder, Gianni Versace.

She was replaced by former Miu Miu head Dario Vitale — though executives say his move was unrelated to the Prada deal.

Now, with a new owner, Versace will be hoping to be brought back into style.

Cultural headwinds

When it comes to fashion, Prada and Versace could not be more different.

"They're kind of polar opposites," said Kirstie Clements, the former editor of Vogue Australia, adding Versace had always been "dynamic".

"If you go back to when it was designed by Gianni Versace, [it was] really bright, colourful, sexy, in your face, glitzy," she told ABC News.

"But not over the top because he always had a sense of restraint."

Alternatively, Prada is a "more intellectual brand", said Clements, with its aesthetic not being overtly sexy.

According to The Australian Financial Review's fashion editor Lauren Sams, Versace's struggles in recent years can be attributed to a post-pandemic economy, but also "cultural headwinds".

"I think it says a lot when Palazzo Versace, the hotel attached to the fashion brand, that when it opened in Australia, it opened on the Gold Coast and that was the perfect spot for it," she told ABC News Channel.

"It was a place where you could be outsized and sexy and outrageous, and that is what Versace is.

"That is not really sort of the time at the moment. We are not really having that moment in fashion."

A mini skirt with maximum impact

In 2022, a very short skirt by Miu Miu became one of the most coveted pieces in the industry.

Debuted on the runway the previous season, the pleated, eye-poppingly low-slung mini skirt captured the attention of the front row — and soon after, the rest of the internet.

The mini skirt was seen on Zendaya, Emma Corrin and Emily Ratajkowski, to name a few.

But no-one sparked more headlines than Nicole Kidman who, at 54, wore the matching set on the cover of Vanity Fair, later saying she "begged" stylists to let her wear the viral outfit.

"Prada has had its 'on seasons' and its 'off seasons', but it's had a lot of publicity through Miu Miu," Clements said.

"It did that little belt skirt. All the influencers were wearing it. It's all about getting a viral moment."

Dario Vitale debuted his first Versace season in September, with the spring/summer 2026 collection during Milan Fashion Week.

The collection referenced the brand's 1980s Gianni Versace era, with critics calling it everything from bold and brash to fun and audacious.

"If you look at that collection, it's really different and it was very divisive. Not everybody loved it," Clements said.

"But when I looked at it I thought, 'That's interesting, that's a move forward,' because I think Versace was stuck."

Made in Italy

Versace was previously owned by US luxury group Capri Holdings.

Now, under Prada, it's going back to its roots.

"'Made in Italy' is a really important designation for Italian designers and I think bringing it back into an Italian company is going to be a really important part of its future," Sams said.

But in Clements opinion, Prada still has "a lot of work to do" in order to make Versace profitable.

"Do they buy something else? Do they buy Armani? Are they going to turn into an Italian conglomerate?" she said.

"It's quite a tricky time in fashion. They're looking for brands that have a solid philosophy like Versace does."

Prada is not yet on the level of luxury goods conglomerate LVMH, which owns 75 brands including Louis Vuitton, Christian Dior, and Moët & Chandon.

But Clements said Prada's purchase of Versace could be the beginnings of an Italian luxury group that could one day rival French luxury group Kering, which owns Gucci, Saint Laurent, Bottega Veneta and Alexander McQueen.

Trends come and go, and come back again — so will Versace rise to the occasion once again?

"100 per cent, if you get it all right," Clements said.

"If you get the right celebrities, the right influencers, the right people on board — and it's the right clothing for the moment — you can do it.