Prada is in talks to buy fashion brand Versace from US investor Capri Holdings for a price that could reach up to 1.5 billion euros. Milan-based Prada and Capri in New York could reach a deal for Versace this month, according to Bloomberg, although the talks could fall through.

A deal would bring the Versace brand back under Italian ownership and make Prada bigger in its bid to compete with France's LVMH, which owns luxury brands such as Louis Vuitton, Moët & Chandon and Hennessy.

Prada was founded in 1913 in Milan by Mario Prada, but has been led by his granddaughter, Miuccia Prada, since the 70s. Capri, once called Michael Kors, was renamed after the American brand took control of shoemaker Jimmy Choo in 2017, and then Versace in 2018.

A sale for $1.5 billion would represent a loss for Capri. Michael Kors bought Versace for $2.1 billion, but the Italian brand has struggled in recent years.

Capri reported revenue of $193 million for Versace in the final three months of 2024, a 15 percent drop compared to the same period last year. The company is expected to be loss-making this financial year and break even next year, it reports. theguardian.

Versace does not make items like luggage, which remain steady sellers for brands like Louis Vuitton during slower periods. There are also questions about whether the brand will remain under the leadership of Donatella Versace, the designer since the death of her brother, Gianni, in 1997.

At Milan Fashion Week, Miuccia Prada said the Versace deal was "on everyone's table."

Prada has gained access to Versace's latest financial and sales data after completing its first audit, Bloomberg reports. KosovaPress.

Capri has said it is optimistic about Versace’s long-term growth potential, but its forecasts show sales falling from $810 million in the current financial year to $800 million next year. However, the company expects sales to rise to $900 million by 2028 and $1.5 billion in the long term. S&P Global Ratings downgraded Capri’s debt rating in February, saying performance pressures and high borrowing could pose problems in repaying its debts, the Guardian reports.

Capri took a hit in 2024 after the U.S. Federal Trade Commission, which regulates competition issues, sued to block an $8.5 billion takeover of Capri by Tapestry, the parent company of the Coach brand.