MILAN — Gianni Versace SpA closed 2013 with growth in profits and revenues and is kicking off 2014 with a double-digit increase in retail sales in the first quarter and further growth prospects through an expansion of its retail network.
This story first appeared in the March 28, 2014 issue of WWD. Subscribe Today.
“We are keeping Made in Italy high,” said an upbeat Gian Giacomo Ferraris, chief executive officer of Versace, during an interview about the group’s year-end figures. “The year 2014 is shaping up to be a good one, on a like-for-like basis, as the closing with Blackstone will take place on April 3. The effects will be seen in the second part of the year. The year 2013 puts me in the condition to start well, in a favorable way.”
In February, Versace agreed to sell a 20 percent stake to the New York-based Blackstone Group for 210 million euros, or $290 million at current exchange. The deal valued the company at 1 billion euros, or $1.38 billion, to accelerate its development with the goal to publicly list the firm in three to five years.
Addressing the most recent international crisis, Ferraris said that “fortunately,” Versace is “not super-penetrated in Russia or Ukraine.” The firm does not have “big investments” in those areas, and the existing ones are through partnerships. “I am more concerned about the Russian customers that travel; this embargo could have an impact in the long run,” noted Ferraris. “I hope the situation will clear soon.”
In 2013, the Milan-based fashion firm saw net profits climb 27.6 percent to 10.9 million euros, or $14.4 million, compared with 8.5 million euros, or $10.8 million, in the previous year. Earnings before interest, taxes, depreciation and amortization, adjusted for currency movements, rose 59.7 percent to 71 million euros, or $93.7 million, reaching 14.8 percent of total revenues.
Sales rose 17.2 percent to 479.2 million euros, or $632.5 million.
Globally, retail sales increased 19.2 percent to 267.6 million euros, or $353.2 million, and wholesale revenues were up 16.6 percent to 174.1 million euros, or $229.8 million. Royalties gained 7.4 percent to 37.5 million euros, or $49.5 million.
Geographically, retail sales jumped 32.2 percent in the U.S. and 18.5 percent in Asia, including a 13 percent increase in China. “This is the third year of impressive growth in the U.S., which has a vivacious economy and a strong interest in our products,” said Ferraris.
Revenues in Europe were up 8.1 percent. “There are many markets where we are underpenetrated, including Europe, and we are looking at unexplored areas, such as Korea, which is entirely new for us; Tokyo and Japan; Brazil, and [other countries in ] South America,” said Ferraris. Versace will continue to invest in Italy with a sprawling flagship slated to open in the storied Galleria Vittorio Emanuele II, opposite Prada and Louis Vuitton, in the last quarter of the year.
Coming up next are openings in Istanbul, Rio de Janeiro and Toronto. “We are an international brand. We are also eyeing main cities that attract tourists — in Florence we don’t have a store yet, for example,” remarked the executive.
Ferraris said last month that Versace has 137 stores worldwide and that the plan is to reach more than 200 units in 2016 in both established and emerging markets.
Versace’s signature line accounted for 60 percent of total revenues in 2013, showing growth in all product categories. Fragrances were up 23.6 percent, lifted by the launch of the new men’s fragrance Versace Eros. Sales of watches gained 16.2 percent.
Ferraris said the company plans to further develop Versus, which has been turned into a seasonless collection with a strong digital element, in the second half of the year, expanding in the U.K. and the Far East. J.W. Anderson, and English-Sri Lankan recording artist M.I.A. have created capsule collections for Versus, and Paris-based Anthony Vaccarello will be the next guest designer.
In 2013, capital expenditure totaled 24 million euros, or $31.7 million, and was mainly directed at retail expansion and online commerce. Versace launched its e-store, developed and managed in-house, at the end of 2012 in Europe and introduced it in the U.S. last year.
As reported at the time of the sale, Ferraris said he hoped for Versace to reach global sales of 800 million euros, or $1.09 billion, in three years.