Versace’s ‘quiet luxury’ blunder opened door to Prada takeover

Mid-tier shoppers switched loyalties as fashion brand pivoted to muted designs

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NEW YORK

Fashion executive John Idol thought Versace leaned too much on ornate designs and aimed to fix it by dialling things down, then boosting prices.

When his company, Capri Holdings Ltd., acquired the fashion house in 2018, he said his strategy would double the brand’s revenue over the next decade. Six years later, that vision has unravelled. He’s sold Versace to Prada SpA for $1.38 billion, a roughly $700 million loss, and sales growth is significantly off course.

Revenue decline

Capri is expecting Versace to report revenue of around $813 million in the current fiscal year that ended in March. That’s below the $843 million in sales it reported in fiscal year 2020, the first full year that Capri was running the brand.