Prada Heir Lorenzo Bertelli Has a Versace Problem

Lorenzo Bertelli, the former rally driver expected to inherit the Prada empire, now faces a less glamorous assignment: making Versace profitable again. At 38, he oversees the Italian fashion house as executive chairman after Prada Group acquired the brand from Michael Kors and Capri Holdings, owner of Jimmy Choo, in December for €1.25 billion ($1.4 billion). Versace joined a luxury portfolio already home to Miu Miu, British shoemaker Church’s and the flagship Prada brand.

While the house Gianni Versace founded in 1978 has become an international icon of bold, glamorous design, its finances tell a less dazzling story. Under Capri, Versace posted a $54 million operating loss in fiscal 2025 as revenue fell 20 percent to $821 million. Prada executives expect another operating loss this year, putting pressure on Bertelli to turn Versace’s fame into stronger sales and, eventually, profits.

Prada has already begun the overhaul, shrinking Versace’s store network and installing new creative leadership. Pieter Mulier, the Belgian designer formerly of Alaïa, became Versace’s chief creative officer on July 1 and reports directly to Bertelli. The pair must build demand as Prada pulls the brand back from markdowns and outlets. “The brand is much bigger than the business,” Bertelli told Vanity Fair in a May profile. “It’s a huge, incredible story, and the potential is so much bigger than the revenue that they are doing.”

Lorenzo Bertelli’s Rally Race to Versace from Prada 

The son of designer Miuccia Prada, 78, and Prada group chairman Patrizio Bertelli, 80, Lorenzo already oversees the group’s marketing and sustainability efforts. At Versace, he is helping decide how much time and money the group should devote to rebuilding the collections. With Prada Group CEO Andrea Guerra running the wider business, the assignment gives Bertelli a turnaround of his own to lead ahead of the expected family handover.

Prada began in 1913, when brothers Mario and Martino Prada opened the Fratelli Prada shop in Milan’s Galleria Vittorio Emanuele II. Decades later, Mario’s granddaughter Miuccia and her husband, Patrizio, built it into an international fashion company. Miuccia also helped redefine the look of luxury, turning industrial nylon into one of Prada’s signatures in the 1980s. 

Lorenzo, the elder of their two sons, joined Prada in 2017 to lead digital communications, stepping back from a rallying career that included an eighth-place finish at Rally Mexico. Among his early initiatives was another reinvention of the family’s signature fabric: Re-Nylon, launched in 2019,  uses regenerated nylon from waste, including discarded fishing nets, carpets and industrial scraps. In 2021, Bertelli joined the board of the family-controlled group, which is listed in Hong Kong.

In a 2025 interview with Harper’s Bazaar Italia, Patrizio confirmed that Lorenzo would eventually become CEO of the family business. He said the succession plan had been worked out with his son, but did not give a date for the handover. Prada Group did not respond to Observer’s request for comment. 

How Bertelli (and Prada) Plan to Rebuild Versace 

Part of Versace’s appeal to Bertelli is how little it resembles the Prada Group’s other labels. In a Vogue Business interview published last December, he compared Gianni Versace’s impact on fashion to Michael Jackson’s on music, crediting the designer with bringing luxury to a broader audience. “Versace still has that fascination today,” he told the magazine. “It’s completely complementary to the other brands in our group—there’s no overlap in identity, no risk of one stepping on the other’s toes. It’s a universe of its own. That’s why it stood out in a sea of options.”

There was a practical attraction, too: Versace could draw on Prada’s factories and the artisans who make its bags, shoes and clothes. “It’s clear that Versace will now have the opportunity to fully step into our world of industrial production,” Bertelli told Vogue Business in the same interview. “Preparations were already underway at Prada Group’s leather goods production hub near Florence. “Here in Scandicci, we’re already getting ready to welcome Versace,” he said.

Luca Solca, a luxury goods analyst at Bernstein, puts the problem more starkly. “The question indeed is whether Versace is a dormant brand or a corpse, as it has been moving sideways for so long,” he told Observer. Half joking, Solca called the turnaround “Prada’s Lazarus project,” invoking the biblical figure Jesus raised from the dead. “It would be vital to immediately imagine a new identity for the brand, leveraging its codes but making them current relative to present values and trends,” he said.

Solca believes that work had already started under Dario Vitale, the former Miu Miu designer who succeeded Donatella Versace as the brand’s chief creative officer in 2025. Vitale lasted less than a year, presenting just one acclaimed runway collection before leaving in December.

Mulier brings experience pairing sculptural clothes with accessories that sell. During his five years at Paris-based Alaïa, Mulier produced hits including ballet flats and the elongated Le Teckel bag. Before hiring him, Bertelli and his parents reviewed  Mulier’s past shows and spoke with people close to the designer, he told Vanity Fair. “One of the reasons we chose him was because he knows how to work with the shapes of the body,” Bertelli said. “You also need someone who can make a sellable product that people like to wear.”

An early glimpse of Mulier’s Versace came at the Los Angeles premiere of Practical Magic 2, where Nicole Kidman wore a black lace Atelier Versace gown he designed. Shoppers will have to wait longer. During Prada’s July earnings call, Bertelli said Mulier’s first collection, La Vacanza, would launch in May 2027, with the broader transition to his designs across Versace’s stores extending into 2028.

What the Versace Turnaround is Costing Prada

Beyond the design studio, Prada is rethinking where Versace sells and at what price. Plans outlined during its March results call include dropping secondary clothing lines such as Versace Jeans Couture and reviving Atelier Versace, its couture business. Prada wants to rebuild demand at full price, even if that transition means selling less in the short term. The company has warned that the creative overhaul and business changes will weigh on Versace’s revenue this year. “We have to move back to go forward,” Prada Group chief financial officer Andrea Bonini told analysts in March.

The pullback is already visible in Versace’s store network. At the end of June, the brand had 210 directly operated stores, down from 220 at the end of December, according to Prada’s interim report. On the July earnings call, Bertelli said planned openings and closures would leave  Versace with a slightly smaller network in 2027 as Prada looks for stronger locations. 

For now, Versace is adding to Prada Group’s sales but weighing on profits. The brand generated €305 million, or about $350 million, in the first half of 2026, roughly one-tenth of the group’s revenue. Prada’s adjusted operating margin fell to 17.4 percent from 22.6 percent a year earlier. Bonini attributed roughly two-thirds of that decline to Versace. 

Versace has at least landed with an owner that is growing faster than two of luxury’s French giants. Excluding Versace, Prada Group’s revenue rose 5 percent at constant exchange rates in the first half of 2026. Rival LVMH reported 2 percent organic growth over the same period,  while Kering’s revenue rose 1 percent on a comparable basis.

That growth has not carried over to Prada’s share price. The group’s Hong Kong-listed shares closed at HK$37.38 (about US$4.76) on Sept. 22, down about 17 percent since the start of the year, according to MarketScreener. Bertelli now has to show investors that Versace is worth the time and money its recovery will require.