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THURSDAY NEWSLETTER FROM ANDREA BATILLA

PRADA AND VERSACE

Nothing could seem more distant than Prada and Versace. The former is a symbol of Milanese bourgeois eccentricity—restrained and discreet—while the latter waves the flag of loud, body-conscious maximalism. Or so it appears.

This is the starting point for understanding how Prada Group’s acquisition of Versace could upend the landscape of Italian, and perhaps global, fashion—and why it has all the makings of a success.

Prada Group, which owns Prada, Miu Miu, Car Shoe, Church’s, Marchesi 1824, and Luna Rossa, closed 2024 with net revenues of €5.4 billion, up 17% at constant exchange rates from 2023. Retail sales rose 18% to €4.8 billion, with a Miu Miu boom (+93%) and a modest increase (+4%) for Prada sales. Wholesale also grew by 7%.

By comparison, Kering—owner of Gucci, Balenciaga, Bottega Veneta, McQueen, Saint Laurent, and others—saw revenues fall by 12% in 2024 to €17.2 billion. Operating profit declined to €2.55 billion (-46%), and EBITDA to €4.66 billion (-29%).

The first takeaway is that Prada, amid a global crisis, has proven to be solid, well-organized, efficient, and guided by a clear vision for each of its brands. This achievement is largely credited to CEO Andrea Guerra, who came from Luxottica—a formidable machine that grew revenues from €2.8 billion to €7 billion between 2003 and 2013.

That the group’s leadership has moved beyond direct family control to a cadre of highly competent managers signals a more rational, less instinctive, and less conflicted approach—built over time with great effort. The roadmap is also reflected in the partnership between Miuccia Prada and Raf Simons, who joined the project with respect and nuance, softening it without trying to overturn it—sometimes, perhaps, too much. But that’s another topic.

This shift is a major novelty in the Italian business landscape. Unlike French or American groups, Italy has historically had very few large companies with professional management structures independent of convoluted, often erratic family dynamics. Apart from Moncler, most are adrift in murky waters, usually due to poorly managed family control that makes objective entrepreneurship nearly impossible.

With these conditions in place, Prada is poised to take the next step: becoming the first true Italian luxury conglomerate. The motivation is clear—it is now impossible to compete with mega-groups like LVMH and Kering, which have nearly unlimited financial resources. To survive, Prada must build an equally strong group, capable of matching their power across all brand management dimensions. Premium retail locations are secured with cash; top-performing celebrities are signed with the best offers; spectacular events require ever-larger budgets.

The only viable way to grow revenues and margins rapidly is through brand acquisition—leveraging scale and applying accumulated expertise.

So why acquire a brand so seemingly different from Prada—like Versace—instead of names more stylistically aligned, such as Jil Sander or Helmut Lang, as in the ’90s? The answer is layered but clear.