Prada Heir Takes Helm at Versace with Bold Revival Plan
Prada SpA is embarking on an ambitious strategy to revitalize Versace, placing Lorenzo Bertelli, the scion of the Italian billionaire family and designated heir, at the helm as Executive Chairman. This move follows Prada's significant acquisition of Versace earlier this year, marking the largest purchase in the company's 112-year history. Bertelli, the 37-year-old eldest son of designer Miuccia Prada and industrialist Patrizio Bertelli, confirmed his new role in an exclusive interview on Bloomberg’s Italian-language podcast, Quello Che i Soldi Non Dicono.
The acquisition, valued at approximately €1.25 billion ($1.45 billion) from Capri Holdings Ltd., is set to diversify Prada's portfolio with a distinct aesthetic. Bertelli emphasizes the immense, yet currently underutilized, global recognition of the Versace brand. “When we ask around about Versace’s global reach, it’s always among the top five names that pop up around the world,” he stated, underscoring his belief that “the brand is much bigger than its current turnover,” and expressing a commitment to "bring the business back to the greatness of its brand." This strategic choice aims to forge a more robust Italian luxury player capable of contending with powerful global rivals, while also countering the trend of Italian fashion houses falling into foreign hands.
Prada’s strategy for Versace draws heavily on the successful turnaround and expansion of its Miu Miu brand. Miu Miu has demonstrated remarkable growth, particularly among Gen Z consumers, recording a 93% surge in retail sales to over €1.2 billion in 2024, contributing significantly to Prada's record profits during a challenging period for the luxury sector. Bertelli indicated that the family thoroughly discussed the Versace acquisition, confident in their "clear ideas on how to leverage the experience we gained by expanding Miu Miu" to address Versace's current challenges.
Despite its high brand awareness, Versace faces a formidable path to revival. The brand has struggled to maintain its prominence since its heyday in the 1980s and 1990s, grappling with falling sales and unprofitable operations. Efforts by previous owner Capri Holdings to revitalize the brand through price increases and design moderation proved unsuccessful, with sales falling 20% last year. Analysts like Luca Solca of Bernstein note that Versace’s once-dominant flashy ready-to-wear outfits resonate less with today’s younger consumers, and the brand suffers from overexposure to wholesale and outlet channels, weak price discipline, and an undersized direct-retail presence. Solca cautioned that "resuscitating glories of the past takes time, money, and is not guaranteed."
However, Prada appears prepared for a patient, long-term approach. The ongoing losses at Versace are considered by analysts to be factored into Prada's share price, allowing the company to prioritize "building a stronger foundation" over immediate, rapid growth. The timing of the deal also appears opportune, as the luxury goods sector shows signs of recovery, with major players like LVMH and Burberry reporting renewed growth, suggesting a potential easing of the global demand slump.
Looking ahead, Bertelli is not planning immediate, sweeping changes to Versace’s management, signaling a measured transition. While the focus remains squarely on Versace, he did not rule out future merger and acquisition opportunities, stating, "We will look at any opportunity because, after all, going around blindfolded is dangerous," though he explicitly ruled out current interest in Armani Group. Bertelli, a former rally driver, expressed no regrets about committing full-time to the family business, viewing the generational transition as "naturally and smoothly" unfolding, and valuing the "slightly more detached way" it allows him to view the business and make conscious decisions.
