Prada Bought Versace

NOW COMES THE HARD PART

The Prada Business Model

When the Prada Group dropped its 2025 numbers, the headline was respectable: revenue climbed 9 percent to $6.63 billion. Not bad in a luxury market that has recently been wobbling like a fashion editor in stilettos. But the real story buried in the earnings call wasn’t Prada’s numbers. It was Versace, the Italian house Prada quietly bought and now must fix. Because buying Versace is the easy part. Turning it back into a powerhouse? That’s the tricky one.

Versace generated about $800 million in revenue in 2025, which sounds fine until you remember the brand’s cultural footprint. For a label with Medusa logos on every nightclub table from Miami to Mykonos, the business hasn’t exactly been firing on all cylinders. Tired? You bet it is and Prada knows this. Lorenzo Bertelli, Prada Group heir and now chairman of Versace, made it clear this isn’t a quick makeover. “This won’t be an overnight task,” he said, which is corporate code for please be patient while we clean up the mess.

The biggest move so far: Prada hired Pieter Mulier as Versace’s new creative chief. Mulier, who revived Alaïa with sculptural elegance and grown-up glamour, officially joins Versace in July. His first full collection is expected in early 2027, so in other words, the creative reset will take time. Prada appears to be betting that Mulier can tone down Versace’s excess without stripping away its swagger which for Versace is a delicate balancing act.

Step One: Clean the Closet

Before Mulier even arrives, Prada has already started the practical work and is focusing on the product line. Executives hinted that collections will be streamlined, quality improved, and structure tightened. Translation: fewer random products, fewer logo experiments, and more focus on pieces that actually sell at full price. The J-Lo 2025 remake? A Flop.

Prada’s CFO Andrea Bonini also confirmed something many in fashion have been whispering about for years: sub-brands are getting the axe, like Versace Jeans Couture…going going, gone. This is classic Prada playbook: fewer products, better margins, stronger identity.

Step Two: Stop the Discounting

Another priority is distribution. Versace has long leaned heavily on outlets and markdown channels, which can quickly erode luxury positioning. Prada plans to tighten retail networks, reduce discount exposure, and push full-price selling. Which is the same discipline that helped turn Miu Miu into one of the current hottest labels.

Step Three: Bring Back Couture

The real signal of where Prada wants to take Versace comes in 2027, when the group plans to relaunch Atelier Versace, the house’s couture line. Couture isn’t about volume and it usually does not create profits because instead, it’s about prestige. It creates the halo that makes handbags and shoes feel worth their eye-watering prices. When one drops $7,500 on a silk tunic, suddenly the $5000 handbag feels right. That strategy will remind shoppers that Versace was once a serious fashion house and not just a belt and bag company.

Prada’s Portfolio Puzzle

There’s also a strategic reason Prada wanted Versace in the first place: the customers don’t overlap much. Prada and Miu Miu cater to intellectual fashion crowds and younger trend-driven shoppers. Versace’s clientele is louder, flashier, and often American or Middle Eastern. It’s that diversification that matters. Prada essentially bought a brand that speaks a completely different luxury dialect.

The Prada Group knows what they are doing. Just look at its sister brand. Sales at Miu Miu surged 35 percent in 2025, continuing its streak as fashion’s most surprising rocket ship. Meanwhile the core Prada label saw a slight dip before rebounding later in the year. Regionally, growth was strongest in the Americas (up 18 percent) and Asia-Pacific (up 11 percent), confirming that luxury demand isn’t dead, but rather, it’s just picky.

Prada CEO Andrea Guerra summed up the mood with cautious optimism. The message to investors is simple: the brand has enormous recognition and cultural power and now it needs discipline.

Or put another way: bring on the Prada business model.