The Tamesis
For the year ended December 31, 2025, Prada Group’s net income at constant exchange rates increased 9% year-on-year to 5.72 billion euros.
The group unveiled Versace’s strategy during an earnings call on Thursday. The acquisition will be completed in December 2025, and last month, Versace appointed Pieter Mulier as chief creative officer. He will join from Alaïa in July and launch his first collection in early 2027.
Versace reported net income of 684 million euros in 2025. While Prada Group said it expects Versace’s turnaround to have a negative impact on revenue, the company has taken action to save operating expenses through post-merger synergies. The merger is expected to be dilutive to the group’s EBIT margin in 2026, before improving thereafter.
Lorenzo Bertelli, successor to Prada Group and chairman of Versace, said that this transformation “will not be an overnight task”, but he is excited about the potential of the brand and its position in the Prada Group’s product portfolio. “We began this journey relying on a number of factors: first, Versace’s exceptional and long-standing visibility; second, its diverse customer base with limited overlap with those of Prada and Miu Miu; strong legitimacy in haute couture, menswear, womenswear and across product categories; and its strong cultural relevance and brand equity,” said Bertelli.
Before Muriel joins, Versace will pursue two initial turnaround pillars. The first is to “continue to evaluate the current range and product lines to identify areas for improvement in terms of quality and construction,” Bertelli said. The second will focus on channel and distribution, brand positioning and the shift to premium full-price sales.
Bertelli said that starting in 2027, all these areas will come together to create long-term demand. It has been announced that the brand’s couture line, Atelier Versace, will be relaunched under Mulier’s leadership. “The collection will continue to evolve as we progress in repositioning the brand, [relaunch] Special projects like Atelier Versace,” he added.
Bertelli continued: “We will also continue to optimize the network and gradually rationalize discount channels and price reduction practices, while focusing on improving in-store productivity through self-service initiatives in retail execution.” Prada Group CFO Andrea Bonini added that he is keen to “clean up” the collection by discontinuing all sub-brands such as Versace Jeans Couture. Bertelli also pointed to opportunities to vertically integrate Versace’s supply chain into the group’s manufacturing network.
Miu Miu takes the lead
In a conference call with investors, the group highlighted that it had achieved five consecutive years of growth despite a slowdown in the market over the past two years. From last year to this year, gross profit increased from 4.34 billion euros (profit margin 79.8%) to 4.59 billion euros (profit margin 80.3%).
CEO Andrea Guerra said on the earnings call that 2025 is an “interesting ride” for the company. The group has explored new ways of working, including using artificial intelligence, improving storytelling and store design, and expanding its hospitality offering (it opened Asia’s first standalone restaurant, Mi Shang Prada Rong Zhai, in Shanghai). “Not only did we perform well, we continued to invest in our people, their expertise and their motivation,” Guerra said. “We continued to invest in our strategic digital initiatives and artificial intelligence tools, as well as the appeal and visibility of our brand. We were able to maintain stable profitability.”
Prada brand sales growth is much slower than Miu Miu. Prada’s retail sales fell 1% in 2025, with signs of improvement in the second half and a positive performance in the fourth quarter. Miu Miu achieved record sales growth in 2024, with sales increasing by 35% year-on-year.
By region, full-year sales in Asia Pacific (the company’s largest market, followed by Europe) were up 11%, while sales in Europe were up 5%. In the Americas, sales increased 18%, driven by local demand. Sales in Japan were up 3% compared with the previous year, and sales in the Middle East were up 15%, driven by local and tourist demand. Regarding the latter, Guerra started the call with a statement in support of employees in the region affected by the war, before noting that this could impact results in 2026 (he is monitoring store closures).
Guerra ended the call firmly. “A few years ago we committed to upgrading,” the CEO said. “We’ve delivered solid, sustained growth. We’re seeing significant improvements across all consumer-facing activities. We’re seeing profitability increase year over year, sequential improvement in working capital, and therefore cash flow. Obviously, we’re pleased with all of these achievements and activity. Now, we’re entering a new journey. We’re working hard, but we’re going to be patient. Agility and efficiency remain non-negotiables.”
