MILAN — Versace may have taken a licking lately, but it wants to keep on ticking.
The Italian fashion house has inked a deal to sell its Swiss watch subsidiary Versace SA for an undisclosed price to Timex. The subsidiary, which will be renamed Vertime SA, will hold an eight-year license to produce Versace-brand watches, jewelry and writing instruments starting in January.
The deal’s structure resembles one struck last year in which Versace sold its eyewear business to Luxottica and word has it that the company is working on a similar transaction to snag a partner to grow its beauty business.
“We’ve been in the timekeeping business for more than 150 years,” Joe Santana, Timex’s president and chief executive officer, said in a joint statement. “While we certainly will use our resources to enhance the business, the change in ownership will take place in a manner that will not disrupt any existing distributors or retailers of the products of Versace SA.”
Details of the Versace watch pricing structure were not available. Still, a source close to Versace said the fashion brand is hoping to grow its timepiece distribution in department stores like Macy’s and Nordstrom.
Neither company released sales projections for the line, but a source familiar with the deal said that Versace watch sales should eclipse 250 million euros, or $324.7 million at current exchange rates, within the next eight years. Versace currently has estimated watch sales of about 15 million euros, or $19.5 million, a year.
“In Timex, we’ve found a partner that is uniquely qualified to realize and enhance the brand’s potential within timepieces and jewelry categories,” Versace ceo Giancarlo Di Risio said in a statement. “This deal allows the Versace Group to continue developing the brand’s largely untapped potential in the watch industry through a licensing partnership with Timex Group.”
The deal is the second tangible development at Versace since Di Risio took the company’s helm in September with a mandate to return Versace to the black. Di Risio’s first adjustment at Versace came earlier this month when the company announced that it’s starting to simplify its myriad diffusion lines. It will cancel the Versace Classic women’s collection and replace the men’s line with a higher-positioned brand known as Versace Collezioni for fall 2005 retail sales.
The Versace watch deal is important for Timex, a $600-million-revenue firm trying to update its image and become more fashion forward. It has hired Joe Moya as vice president of design and merchandising and even changed its 50-year-old tag line from, “Takes a licking and keeps on ticking,” to a snappier “Life is ticking.”
Timex, best-known for its lower to moderately priced watches in the $35 to $50 range, recently flirted with the concept of designer watches when it asked Matthew Williamson, industrial designer Karim Rashid and contemporary urban artist Dave Kinsey to create limited-edition timepieces retailing for $150.
— With contributions from Courtney Colavita, Milan, and Marc Karimzadeh, New York