Prada Revises Versace Acquisition Deal Slashing $200Mn

The high-end fashion sector has seen a breakthrough as Prada, the Italian fashion giant, renegotiated the acquisition price of Versace by lowering it by $200 million. The move follows economic pressures due to tariffs imposed by the previous U.S. President, Donald Trump.

The Italian fashion group is set to announce the $1.38 billion tie-up with the Capri-owned house as soon as Thursday.

The transaction, which was initially worth $1.6 billion, has now been sealed at around $1.38 billion. This piece explores the implications of this action, the drivers of the renegotiation, and what it might do to the luxury fashion market.

Background of the Deal

Prada’s takeover of Versace is a historic event in the world of luxury fashion. Versace, a subsidiary of Capri Holdings Limited, is famous for its daring designs and iconic brand. The talks between Prada and Capri Holdings have dragged on for more than a month, with the initial price tag of €3 billion (around $3.3 billion) set. But the Trump administration’s tariff imposition disrupted global patterns of trade, creating market volatility and a renegotiation of deal terms.

The Role of Trump Tariffs

The Trump administration’s trade policies, which included sweeping tariffs on foreign trading partners, have had far-reaching consequences. The tariffs have caused markets to be disrupted and businesses in numerous sectors, including high-end apparel. Capri Holdings’s share price fell more than a third and its market value fell too. This financial burden led both parties to renegotiate the terms of purchase.

Key Changes in the Deal

The renegotiated deal shows a discount of more than $200 million, taking the acquisition price to $1.38 billion. The discount was made to provide for the challenges that tariffs were expected to pose to Versace’s business. The timing of the announcement of the deal also varied, and minor price tweaks remained possible. Capri’s CEO, John Idol, had flown to Milan to close out the details with the Prada family.

Leadership Transition at Versace

Another notable aspect of this acquisition is the leadership transition at Versace.

Retired in March 2025, Donatella Versace was the creative engine behind the brand for thirty years.

Dario Vitale, one of Prada’s brands and Miu Miu design director, was replaced. As part of Prada’s ownership, the new leadership is expected to bring Versace’s creative orientation a fresh vision.

Implications for the Luxury Fashion Industry

The Prada-Versace deal is set to redefine the luxury fashion industry. With the inclusion of Versace in its stable, Prada hopes to consolidate its market position and increase its penetration. But the effect of tariffs on international trade and the luxury industry cannot be ignored.The renegotiating of the agreement illustrates the necessity of flexibility and strength against financial crisis.

Eventually

Prada’s move to lower Versace’s acquisition price by $200 million indicates how external economic factors impact high-value business transactions. In addition to impacting international trade, the Trump administration’s tariffs brought extreme realignment in the luxury fashion sector. Joining this new era are Prada and Versace, and the industry will be watching closely the direction this acquisition will take and how it will shape luxury fashion in the future.