Prada Unveils Versace Turnaround Plan, Warns Integration Will Cut 2026 Margins

Prada Group closed 2025 with roughly €5.72 billion in net revenues and used an investor and analyst call on March 5 to lay out a clear, costly plan for Versace after completing the acquisition in December 2025. Management warned the consolidation will dilute the group’s EBIT margin in 2026 even as it promised a multi-year turnaround that leans on product discipline, channel control and Italian manufacturing muscle.

Executive chairman Lorenzo Bertelli set out two concrete pillars for the turnaround: first, a full assessment of Versace’s collections to improve quality and structure; second, a refocus on channels and distribution to drive quality full-price sales. Prada Group CFO Andrea Bonini was blunt about assortment pruning, saying he is keen to “clean up” the collections by discontinuing all sub-brands such as Versace Jeans Couture. Bertelli added that “From 2027 onward, all of these areas will be brought together to create long-term desirability.”

Operational moves are already mapped. Group CEO Andrea Guerra said Versace, while remaining independent, will leverage Prada’s platform “for all potential and possible manufacturing. Obviously, we have already started planning it.” Prada’s playbook is vertical integration: integrating supplier maestranze and folding production where it adds value, a step that Metromodels and company commentary say will include restructuring costs and inventory adjustments that push short-term profitability down but should create synergies over time. WWD noted Luca Carraro has returned to the group in an industrial operations role to help execute that side of the plan.

Design and desirability are central to the relaunch. Pieter Mulier has been named to lead creative at Versace, but timelines differ in the press: WWD and Vogue say he will join on July 1 and present his first collection at the beginning of next year while reviving Atelier Versace; Globalbrandsmagazine puts his start in July 2026 with an inaugural complete collection in early 2027. Donatella Versace will remain on as an ambassador, and management has explicitly flagged a revival of Atelier couture as part of the brand’s return to high-fashion identity.

Numbers and market reaction are messy. Vogue lists Versace’s 2025 net revenues at €684 million while Metromodels pegs the figure at around €850 million; Metromodels cites Prada’s investment at €1.25 billion, while Globalbrandsmagazine reports roughly $1.38 billion. Citi analyst Thomas Chauvet called results “broadly in line with expectations,” warned visibility is low on the scale and timing of Versace’s turnaround, and noted consensus forecasts that exclude Versace see a 9 percent increase in 2026 sales and operating profit of about €1.37 billion, with one analyst line truncating a projected contribution from Versace’s consolidation as “likely to contribute 620.”

Prada has signaled no appetite for further buys, placing family stewardship and hands-on retail discipline center stage as it tries to reforge Versace’s exclusivity by closing outlet channels, cutting budget lines, and rebooting couture. The next eighteen months will test whether the margin hit the group accepts for 2026 buys it the time and control needed to rebuild Versace into a profitable, desirably priced house by 2027 and beyond.