By Manuela Mesco
Gianni Versace Spa's 2014 revenue and profit rose by
double-digits, as the Italian fashion firm is trying to reach a
wider customer base in both emerging and mature markets.
The label, popular among celebrities like Angelina Jolie who had
her wedding dress designed by Donatella Versace last year, said
further growth could come as the euro nears parity against the
dollar. "I've been waiting for parity [for years]," said Chief
Executive Gian Giacomo Ferraris in an interview. "Now we are more
competitive, our prices are more interesting."
Revenue rose 17% to EUR548.7 million, while net profit grew 27%
to EUR26.3 million.
Versace's rising revenues comes in contrast to halted growth at
rival luxury players whose sales were flat or falling in 2014 after
years of strong growth. For instance Gucci, owned by the French
conglomerate Kering SA, and Prada both saw their revenue fall
slightly in 2014 on the year, to around EUR3.5 billion. Sales were
affected by a decisive slowdown in China, also due to the
government austerity campaign against gifting and general harsh
marco economic conditions elsewhere. The move didn't affect
Versace, Mr. Ferraris said in an interview.
Versace, whose sales are a fraction of its larger rivals, last
year sold a 20% stake to private-equity fund Blackstone Group LP to
finance growth. "Unlike other players, we still have large shares
of the market to win," said Mr. Ferraris. "Both in emerging and
mature markets, we are often under-penetrated."
To exploit such untapped market shares, Versace has been
planning to open more stores around the world--a move that has been
possible thanks to the EUR210-million-deal with Blackstone. The
money allowed the Italian firm to open more than 40
directly-operated stores around the world in 2014 and win prime
locations, like Fifth Avenue in New York or Galleria Vittorio
Emanuele in Milan. "We couldn't afford such locations before," Mr.
Ferraris said. Another 30 stores will open this year in the U.S.,
Europe and Asia--especially in Japan.
But the difficult macroeconomic conditions affected Versace,
too. A previous estimate of doubling 2013 sales of EUR480 million
by 2016 is now not reachable until at least 2017, Mr. Ferraris
said.
The house, founded by designer Gianni Versace who was shot dead
in 1997, is also playing down its overtly sexy creative vision,
which has made it iconic for decades, with more simple collections.
"Versace is stabilizing," Mr. Ferraris said. "We're still glamour
and colorful, but if we want to reach a wider customer base we also
have to be more consistent."
As a result, sales grew in all areas, with North America the
fastest-growing market for the third year in a row, the company
said. Department stores like Bergdorf Goodman, a key retailer to
win the U.S. market, are again starting to carry part of Versace's
collections, Mr. Ferraris said.
Versace is getting ready to go public and working on its
organizational structure to prepare for the IPO process. "This is
where Blackstone is really an added value," Mr. Ferraris said. "The
decision to sell to them was not down only to the price--their
offer was not the best we got. They agreed on our business plan and
could offer expertise to go public."
As the euro lost value, some luxury players such as Chanel said
they would slash prices in China and increase them in Europe to cut
the price gap between the two regions. Mr. Ferraris said that
Versace too is looking into how to react to the increasing price
differentials and balance it, but a decision will be taken only in
May, after the orders for the full-winter 2015 collection will be
over.
Write to Manuela Mesco at manuela.mesco@wsj.com
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