Luxury fashion retailers are accelerating store closures as slowing demand, economic uncertainty, and shifting consumer spending force even the industry’s biggest names to rethink their global footprints.Over the past year, several luxury companies have announced plans to shrink their retail networks as they prioritize stronger-performing locations, streamline operations, and invest in long-term growth rather than maintaining expansive store portfolios.Kering closed 133 stores across its brands in 2025 and plans to shutter an additional 100 locations, with further reductions under review. The French multinational luxury goods group owns some of the most recognizable luxury houses, including Gucci, Saint Laurent, Bottega Veneta, Balenciaga, and Alexander McQueen.Ferragamo also expects to close roughly 70 stores between 2025 and 2026, while Burberry shuttered 21 locations during fiscal 2026.Industry analysts do not expect a rapid recovery.According to the McKinsey & Company State of Fashion 2026 Report, the global fashion industry is projected to grow only in the low single digits in 2026, as macroeconomic volatility, tariff pressures, and weaker consumer sentiment continue to weigh on demand, particularly in the U.S.Now, another iconic luxury company is the latest to reduce its retail footprint while accelerating a broader brand transformation.Founded in 1913, the Prada Group is a Milan-based global luxury fashion company that owns Prada, Miu Miu, Versace, Church’s, Car Shoe, Marchesi 1824, and Luna Rossa.The Prada Group confirms Versace store closuresThe Prada Group has confirmed that Versace will undergo additional store closures in 2026 and 2027 despite performing in line with company expectations during the first half of the year, according to the company’s earnings call.The planned closures are part of a broader effort to eliminate non-strategic locations, improve retail execution, and position the brand for its next phase of growth following Prada’s acquisition of Versace.”Retail execution continued to be a key area of focus alongside the rationalization of the network with selected closures of non-strategic stores,” said Prada Group CMO and Head of Corporate Social Responsibility Lorenzo Bertelli during the earnings call.The company has already closed 10 Versace stores since the end of 2025 and plans to shutter approximately 10 more locations while relocating select boutiques to stronger markets.”Let’s say we will have another slightly smaller network next year, from 2028, we will look at opportunities of better location,” said Bertelli.As of June 30, 2026, the Prada Group operated 832 stores across more than 70 countries, according to its first-half 2026 earnings report. Why the Prada Group is closing Versace storesThe closures come as the Prada Group continues integrating Versace after acquiring the Italian fashion house from Capri Holdings in December 2025 in a cash deal valued at €1.25 billion (approximately $1.44 billion). The acquisition marked the end of Donatella Versace’s nearly 30-year leadership of the brand. She stepped down as chief creative officer in April 2025, and Pieter Mulier officially became Versace’s chief creative officer on July 1, 2026.Mulier’s first collection, ‘La Vacanza,’ is scheduled to debut in May 2027, and the Prada Group expects all Versace stores to carry only his collections by the second half of 2028.”We worked hard on many different things in these first six months, organization, synergies, costs, journey, commercial milestones. It’s a long journey,” said Prada Group CEO Andrea Guerra. “We need to fight. We need to get all the right opportunities and not burn any of them. We are all working on it. Even for the Versace brand, these first six months have been in line with our desires.”The store closures reflect the Prada Group’s broader strategy to reshape Versace by concentrating investments in stronger retail locations and refining the brand’s positioning under its new creative leadership.
The Prada Group confirms more Versace store closures through 2027.Francesca Volpi/Bloomberg via Getty Images
The Prada Group posts continued growthDespite the changes at Versace, the Prada Group continued to deliver strong financial results.During the first half of fiscal 2026, the company reported a 16% year-over-year increase in net revenue, while retail sales rose 12%.According to the company, Versace performed in line with expectations, as management focused on improving sales quality, strengthening retail execution, and beginning the brand’s creative repositioning following Mulier’s arrival.Versace accounted for approximately 10% of the Prada Group’s first-half net revenue, totaling €305 million.Here’s some of my previous coverage of store closures:88-year-old retailer closing 75 stores, slows expansionFormer retail giant closes more storesAfter years of store closures, fashion retailer shifts strategy”In a geopolitical and macroeconomic scenario that remained turbulent, we continued to execute with rigor,” said Bertelli.”Our commitment to the highest standards of product excellence, nurturing craftsmanship and creativity as non-negotiable pillars, allowed us to reach 22 quarters of uninterrupted organic growth. The environment is likely to remain volatile; we must stay nimble, innovate continuously, taking advantage of the strength of our manufacturing know-how, and continue to balance short-term discipline with long-term vision.”Related: Sportswear giant continues store closures nationwide