Prada streamlines Versace with fewer outlets and lines

Prada S.p.A. is initiating a strategic transformation of the recently acquired Versace brand, focusing on higher-margin sales and a more exclusive product lineup. The luxury group plans to discontinue secondary lines, including Versace Jeans and various ready-to-wear sub-brands, to refocus on the label's core luxury positioning.

As part of the overhaul, the company will relaunch the high-end Atelier Versace line with a dedicated focus on haute couture and specialized projects. This move coincides with the appointment of Pieter Mulier as creative director. Mulier, who joins from the Richemont-owned label Alaia, will take up his post in July, with his debut collection expected to premiere in early 2027.

Central to the new strategy is a significant reduction in the brand's reliance on discounted retail channels. Prada intends to scale back factory outlet exposure and curb general discount campaigns to protect brand equity. According to data from Morgan Stanley, Versace currently has one of the highest levels of outlet exposure in the luxury sector, with more than 30% of its sales derived from such channels. The brand’s 62 outlet locations currently outnumber the 52 stores operated by Salvatore Ferragamo S.p.A. and the 54 maintained by Burberry Group plc.

Financial performance for Versace remains under pressure during this integration phase. The acquisition impacted Prada's profit margins in 2025 and is expected to continue affecting operating results throughout the current year. While Versace reported an operating loss last year, Prada aims to narrow this to a double-digit figure in 2026. Versace recorded revenues of 684 million euros in 2025, and Prada expects a mid-single-digit decline in sales at constant exchange rates for 2026 as the restructuring takes hold. A broader recovery in operating performance is projected to begin in 2027.