Although Capri made no mention of a sale of Versace at its investor day last week, industry reports say that the Italian label is up for grabs.
Prada Group reportedly is the front-runner. The group has a four-week exclusive access agreement to Versace’s financial data, Italian outlet Il Sole 24 reported on 20 February. Former Gucci CEO Marco Bizzarri, under his new investment firm Nessifashion, Investcorp and private equity firm Permira are also reportedly in the mix. Barclays is said to be managing the process for Capri.
Speculation that Capri may sell Versace, as well as Jimmy Choo, ramped up after its merger with Tapestry fell through last year. Capri CEO John Idol said in the company’s third-quarter earnings call on 5 February that he has read the marketplace speculation and that Capri will always listen to interested parties. He continued: “Currently, that’s not what our strategy is. Currently, our strategy is [that] we’re going to build three businesses, as we’ve got three incredible assets. And where people are interested in parts or the whole, we will always have that conversation.” (Capri, Versace and Prada Group did not respond to requests for comment.)
Should a sale happen, whoever comes out on top would have a reinvigoration project on their hands. In fiscal 2025, Versace’s revenues declined 15 per cent to $193 million, with the Americas down 21 per cent, EMEA (Europe, the Middle East and Africa) down 13 per cent, and Asia dropping 11 per cent, according to Capri earnings.
There’s room for growth in the right hands. “Versace is a big name, but it is still a relatively small business that should be bigger,” says Neil Saunders, managing director of Globaldata’s US retail division. To achieve this, the new owner will need to balance long-term brand value creation while balancing short-term operational efficiencies, says Bryce Quillin, economist and co-founder of luxury strategy agency It s A Working Title LLC. To do so, the brand needs a “major clean-up” of distribution and off-price, says Luca Solca, retail analyst at Bernstein. (Idol noted in the earnings call that Versace has reduced markdowns, and is striving to improve store productivity and return its wholesale business to growth.) Because of how well-known Versace is, it has potential, he adds.
Here are the top priorities for Versace’s potential new owner, according to experts.
Re-establish authority
Versace is a storied house known for its bold designs and glamorous clientele. Lately, the brand’s cultural clout has faded, some experts believe. “The brand’s core identity has been diluted in recent years, making it essential to reinforce its position as a high-fashion leader rather than a mass-market luxury brand,” Quillin says. Versace can do this by leaning into its history, fashion critic and creator Osama Chabbi offers. “I want to get more of the backstory of what has made this house so powerful and so institutional.” There’s a solid foundation, he adds: “Donatella is probably one of the last standing OGs.”
Ultimately, the brand needs consistency, says Oliver Chen, senior retail analyst and managing director at TD Cowen. “You need a little consistency to be free to be yourself and to stand out unapologetically,” he says. “It has to do with creative energy and heat and Donatella and the right shows and making sure that’s coordinated with marketing, stores and product.”
Leaning into Versace’s history and re-positioning it as an authority in the market wouldn’t have to mean switching up the brand’s aesthetic. In fact, experts recommend quite the opposite. “The brand must remain bold and glamorous, and there is a case to be made that it could be more daring,” Saunders says. There is also nothing wrong with emphasising exclusivity, he notes. Quillin agrees. “Luxury consumers seek deep, meaningful brand connections,” he says, noting that Versace can reinforce this via thoughtful storytelling, cultural collaborations and immersive activations (physical and digital).
Expand products
“For Versace, the cultural consciousness of the brand is stronger than the product,” Chabbi says.
Product strategy was a key focus during Capri’s investor day and was one of three strategic initiatives to be fleshed out “by strengthening our core categories, while balancing fashion and timeless design, with a strong focus on accessories and footwear”, CEO Emmanuel Gintzburger told investors. In Solca’s view, the revival should start with fashion “because that is the Versace calling card”, he says.
The four key areas of focus are drilling down on house codes, growing accessories to $600 million, growing footwear to $250 million, and building out the men’s market share, Gintzburger said last Wednesday. (The latter is a smart move, Chen says, adding that his friends all like the brand.) There’s more to be done, though, analysts flag. Beyond fashion, the brand has opportunities to expand further into categories such as fine jewellery, watches and homeware, leveraging its existing design codes for high-margin product lines, Quillin says.
Re-emphasise craft
In its current era, Versace isn’t capitalising on narratives around craftsmanship and quality, Chabbi says. “You don’t go to Versace thinking you’re going to get the best leather and the best made dress,” he says. “When they had Atelier Versace, that was peak couture for me. It was Italian couture at best.”
Versace is already launching a new luxury line at the brand’s Milan Fashion Week Autumn/Winter 2025 show. And in this month’s earnings call, Idol said that the company began repositioning the brand to “place greater emphasis on luxury and craftsmanship” in autumn of 2023. A new owner would do well to lean further into the brand’s recognition for well-made goods. In Chabbi’s view, this means bringing back the couture show and showing on the Paris calendar. “For me, that’s the 101 survival tactic.” Quillin agrees, noting that growth and profitability need to be enhanced without resorting to over-commercialisation.
“Elevated craftsmanship and product storytelling [must] remain at the heart of the brand,” he says.
Up international expansion
Increased international expansion should be a priority, requiring localised approaches. Across the board, Saunders recommends an accessories-first approach, given this category tends to translate better internationally than ready-to-wear.
Asia: “Versace has untapped potential in Asia,” Capri CFO and COO Tom Edwards told investors last Wednesday. Here, digital luxury engagement is key on local platforms including WeChat, Xiaohongshu and Tmall, Quillin says, as well as using digital-first strategies like live-stream shopping and AI-driven personalisation.
Middle East: Because of Versace’s bold aesthetic, it’s a good fit for Middle Eastern markets, Saunders says. Here, luxury consumers expect VIP shopping services, bespoke product offerings and ultra-exclusive brand experiences — so Versace should focus on private fashion presentations, limited regional collections and flagship store expansions in high-net-worth shopping districts, Quillin says.
India: Given India’s luxury market is emerging (and fast), here, Versace should emphasise heritage craftsmanship and long-term investment pieces, Quillin says, to appeal to customers keen on status-driven luxury purchases.
All said, the brand shouldn’t rush to amp up its global presence, Chen cautions. “You’re not supposed to do this stuff all at once,” he says. “You don’t want to open up stores or invest in a geography until you have the face that you want. It’s about getting your house in order, meaning making sure your existing footprint is optimised before you start [expanding]. But the opportunity exists.”
Prada vs private equity
Prada is a better fit than it may seem, experts agree. For one, Versace would be heading home. “That stuff matters,” Chen says. “Ideally, you’d want to be in the hands of a partner that really understands you.” A luxury conglomerate like Prada would mean a focus on long-term growth, Quillin says. This is a good thing, he notes — such a house would (and should) prioritise creative leadership, craftsmanship and storytelling to enhance Versace’s position as a “true” luxury house.
The parallels between the two brands could be a plus, Chabbi flags. “It would be the most iconic partnership,” he says. “Because Miuccia is also one of the standing global icons for fashion. These two women have shaped what fashion is today.”
For all the pros, Saunders cautions, a Prada acquisition risks a change in aesthetic. “Ideally, Donatella Versace needs to be retained along with Emmanuel Gintzburger, and Versace needs to be given the artistic freedom to do its own thing,” he says.
If the Prada deal doesn’t come to fruition, Versace will likely be another private equity get. This is more risky, Quillin says.
“Based on some recent historical experiences, we might expect that a private equity investor could focus on short-term profitability, cost-cutting and aggressive regional expansion, which could drive immediate growth but risk eroding brand equity,” he says. “Private equity firms often aim for an exit within three to seven years, meaning their primary focus would likely be on optimising margins, restructuring operations, and scaling profitable product lines.”
This could mean sacrificing long-term brand prestige for financial performance. “An ideal scenario for Versace would be ownership by a strategic luxury investor with the operational discipline of private equity, ensuring both creative revitalisation and sustainable profitability,” he says.
Solca, though, believes a private equity acquisition may be less likely because of the potential risk level. “I am not sure a PE investor would be interested, as they typically back momentum stories — not turnaround stories.”
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