Capri Holdings Limited announced on December 2, 2025 that it has completed the sale of its Versace business to Prada S.p.A. for $1.375 billion in cash, subject to customary adjustments. The transaction gives Capri a clean‑sheet opportunity to repay the majority of its $2.87 billion debt, reducing net debt to roughly $1.6 billion and freeing capital for future investments in its flagship Michael Kors and Jimmy Choo brands.
Versace’s recent performance has been a key driver behind the divestiture. In the third quarter of fiscal 2025, Versace generated $193 million in revenue – a 15.0% decline – and posted an operating loss of $21 million, widening from $6 million in the prior quarter. By contrast, Michael Kors reported $909 million in revenue with $147 million operating income, while Jimmy Choo generated $159 million in revenue and a modest $6 million operating loss. Capri’s fourth‑quarter fiscal 2025 results showed a $645 million net loss, or $(5.44) per diluted share, underscoring the financial pressure that the Versace sale helps to alleviate.
Prada’s acquisition of Versace positions the Italian group as a more formidable competitor to LVMH and Kering. The deal adds a high‑profile, heritage‑rich brand that complements Prada’s existing portfolio and expands its global reach. Andrea Guerra, Prada Group CEO, noted that the acquisition “adds a new dimension, different and complementary” to the group, while marketing director Lorenzo Bertelli highlighted that Versace’s brand equity and global recognition meet Prada’s criteria for strategic fit and financial stability.
Capri’s management has framed the sale as a turning point. Chairman and CEO John D. Idol said the proceeds will “substantially strengthen our balance sheet” and that the company will now “focus on the growth of our two iconic brands Michael Kors and Jimmy Choo.” The company has already authorized a $1 billion share‑repurchase program slated to begin in fiscal 2027, further signaling confidence in its post‑sale trajectory.
Analysts have offered mixed views on the transaction. While some have expressed reservations about the valuation and potential integration challenges, others see the deal as a prudent move that allows Capri to shed a loss‑making brand and concentrate resources on its more profitable segments. The market’s reaction to the announcement reflects a focus on Capri’s debt reduction strategy and the potential upside for its core brands, rather than on short‑term price movements.
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