Italian fashion giant Prada announced on Tuesday that it has acquired luxury brand Versace for $1.38 billion, well below the roughly $2 billion paid by Capri Holdings in 2018. The deal brings two major Italian luxury fashion names under one roof, expanding Prada’s portfolio, which already includes Miu Miu. Prada aims to compete with big rivals like France’s LVMH, owners of Dior and Louis Vuitton. Donatella Versace stepped down as creative chief in March after 27 years. She was replaced by Dario Vitale, formerly with Miu Miu. Capri Holdings is selling Versace at about a $700 million loss due to slowed sales and changing styles, including a move to more minimal designs and higher prices. Prada confirmed the deal is complete after regulatory approvals. Capri’s CEO John D Idol said: "We plan to use the proceeds to repay the majority of our debt, which will substantially strengthen our balance sheet." Prada CEO Andrea Guerra said earlier: "Versace has huge potential. The journey will be long and will require disciplined execution and patience."