Versace on the road to new perfection
BY SANDY STRASSER
Versace is one of the most extravagant and glamorous labels of the luxury fashion world. The style is striking and splendid. A golden medusa head as logo and a baroque signature pattern have been the trademark for the fashion house from the beginning. We asked Gian Giacomo Ferraris, CEO of Gianni Versace SpA, for an interview and enquired about the plans to go public and how the expansion plans of the fashion house are developing.
Mr Ferraris, all was quiet on the Versace front for a long time. What awoke the brand from its deep sleep?
Gian Giacomo Ferraris: Over the last five years, we have focused on re-gaining Versace’s perception as an exclusive lifestyle brand, an iconic world that encompasses many categories, from fashion to accessories, from fragrances to jewellery as well as watches. With Ms. Donatella Versace, we are strengthening this world that perfectly interprets the glamour, sophistication and exclusivity of Versace’s style.
We reorganised the company, giving Mrs Donatella Versace as our Artistic Director more control over all collections and oversaw Versace’s return to the black in 2011. Last year the company achieved healthy top line growth in all areas of its business and across all geographies.
Consolidated revenues in 2014 grew by 16.9 percent to €548.7 million, while EBITDA rose 9.8 percent to €67.6 million.
Retail sales rose 16.1 percent to €310.8 million, while the wholesale business lifted revenues 17.7 percent to €195.7 million. Royalties were up 19.2 percent to €42.3 million.
Growth in the Versace brand was powered by revenues from directly operated stores, which were up more than 16 percent, while Versus Versace more than doubled revenues year-on-year, due to strong collections and the success of the new brand’s business model. Ready-to-wear, shoes and leather goods performed very well for both men and women across the group’s brands. Fragrances and Home Collection also grew significantly.
Growth in North America was particularly strong with revenues up 28.8 percent and followed revenue growth of around 30 percent in each of the preceding two years. In Asia, revenues rose 15.7 percent and in Europe 13.7 percent.
In the past year you have opened 40 new shops worldwide. A further 30 are due to follow by the end of the year. Why is the investment in Europe so important here?
G. G. F.: The market is global and Versace is an international brand attracting local customers and tourists in each country worldwide. When we open a store we consider it as an international destination.
We are following our distribution strategy focusing on EEUU and emerging markets. We opened in Dusseldorf last year and now in Berlin. This October we opened in Madrid following the opening in Barcelona last year. Also, we are very proud of our Galleria store in the heart of Milano which was part of the bigger Galleria restoration project we took part in.
Being Versace, a worldwide brand, in Brasil we opened the first direct operated store in Rio de Janeiro followed by another boutique in shopping mall Sao Paolo Iguatemi. And of course we keep strengthening our presence in markets such as USA and APAC (e.g. the 270 square metre flagship store 720 in Hong Kong Kowloon). In Canada we opened Versace Home in Vancouver in the design district which underlines the aim to provide a 360° Versace experience covering several product categories. Concerning Japan, a new Versace boutique in Ginza will be opened by the end of this year following the new Versus Versace opening in Aoyama.
As for Versus development we opened three stores worldwide: in New York, in London and in Paris simultaneously this September in conjunction with Versus Versace SS16 Fashion Show presented during London Fashion Week.
What role does Germany play for you in this?
G. G. F.: Germany represents an important market for us and our choice to strengthen the presence of our brand in this country is a natural consequence.
We’re an international brand with a very strong worldwide awareness and we’re attracting more and more customers from all over the world.
To satisfy clients’ requests we are developing our distribution strategy focusing on EEUU and emerging markets. In 2014 Versace opened a new boutique in Dusseldorf, in Königsallee, of 540 square metres featuring marble mosaics, brass, and perspex creating a luxurious and contemporary ambience in which the Versace prêt-à-porter collections and accessories for men and women are presented.
Now the new opening in Berlin affirms Versace’s presence in Germany.
With your help, Versace is to be whipped into shape for the market and prepared for the stock exchange. What is the reason for this step?
G. G. F.: Versace has demonstrated in the past five years that it is a resilient company - growing by double digits - which is a relevant quality for a fashion, luxury and lifestyle company that plays an international role in the market. But there are unpredictable circumstances as well which can impact the market. Being resilient is a must to be a strong and stable company.
With its unique and iconic style, Versace satisfies customers’ requests in each product category - from clothing to accessories, luxury goods to the home collection.
What stock market locations are attractive for you and why?
G. G. F.: Taking the company public is a process, and we are getting prepared. We need to strengthen the financial and organisational structure of the company, such as the introduction of monthly closure and transparent communication, and adapt systems and structures with an assessment of employees and managers, and projects that will increase margins and brand equity.
The Versace family is ready for this step, now we have to prepare the company as well. Entering in the stock market is the logical consequence to having chosen Blackstone as our minority investor. This kind of project requires time and know how.
In addition, a shop for your second line ‘Versus Versace’, which was to address the young, digital generation, was designed in advance. What distinguishes the label?
G. G. F.: Today Versus Versace is not a second line at all. Versus is aimed at the young digital generation and is deliberately designed to be independent of fashion seasons. “Show now, buy now, wear now” is the philosophy. The collection was available online straight after the show in London and was very successful. After regaining the license three years ago, we are now ready for the new roll-out of the label.
What marketing strategy do you have to make it more well-known?
G. G. F.: Take symbols of heritage and make them relevant today. The distinctive characteristic of Versace is the usage of creativity power. Donatella has the ability to project herself into the future, interact with young people and anticipate trends. Of course, being in the forefront is part of the nature of the brand. The ability stems from an obsession by the interest of younger generations, and gives us incredible competitive edge.
The expansion will continue in the USA, Europe, Asia, and Japan where new retail facilities are planned, including a flagship store in Berlin and in central Tokyo, Ginza. Europe and the U.S. are new markets for us, they are not saturated, we only have 10 stores in the U.S. – we opened stores in Toronto, Miami and Hawaii. We will open another store dedicated to Versace accessories in Vancouver by the end of 2015.
Versace’s international awareness could not be achieved without Donatella whose boundless creative energy and leadership continue to drive our success. Our international customers want pure Versace and our DNA has limitless potential to be distinctive for them: locals and tourists are equally important.
Anthony Vaccarello has been the new creative director of Versus Versace since the beginning of the year. Why is it him, in particular, who is the right one for this post?
G. G. F.: The appointment of Anthony Vaccarello as Creative Director is the last step in the evolutionary path and in defining the new strategy of the brand started in 2012, when Versus Versace was brought back in house while before that time it was a license. Today it is not a second line at all, it’s an independent brand which talks to a young audience who shares the same rebel attitude that this brand has had since its foundation in 1989.
How do you proceed in perfectly realizing the digital transformation for your core brand too?
G. G. F.: The development of the retail business remains a key priority and recipient of investment, as does Versus and E-Commerce. We launched our E-Commerce channel, that is done in-house and reaches nine countries. We implemented our distribution plan, opening stores in new markets but also strengthening our presence in established regions such as Europe and the US. The capital brought in by Blackstone of around €150 million is being invested in new stores and in new projects like the development of Versus Versace.
What fascinates you personally about the brand Versace and how, ideally, should people perceive the company?
G. G. F.: ‘Passion’ is the key element: Mrs Donatella Versace is a very talented designer and she has passion and a lot of creativity. She is also very experienced in balancing between her artistic inputs and the company’s business. We respect each other’s area and I believe this is one of the main reasons for the company’s rapid growth in the recent years and for the future.
Versace’s style is well known throughout the world – an outstanding combination of the classical and the modern, where iconography and motifs from our DNA combine with the latest innovative fabrics and materials, brought together to create a unique style.
Gian Giacomo Ferraris
Gian Giacomo Ferraris has been Chief Executive Officer of Gianni Versace S.p.A. since July 2009. Prior to this appointment, he was CEO of the Jil Sander Group. His achievements at Jil Sander included, amongst other things, the redefinition of the strategic brand positioning and group restructuring. From 1999 to 2004, Mr. Ferraris was Managing Director of the ready to wear division of the Gucci Group with a long list of achievements across all the group’s brands: Gucci, YSL, Balenciaga, Stella McCartney, Alexander McQueen and Bottega Veneta.
This article was published in The Produktkulturmagazin issue Q4 2015. Picture credit © Rahi Rezvani