MILAN — Versace plans to invest about 45 million euros, or almost $70 million, to open 11 stores this year, mainly in Asia, further tapping a market it hopes will replace the U.S. as its second largest in terms of sales after Europe.
In an interview at the Italian fashion group's atelier on Via Jesu on Thursday, Versace chief executive Giancarlo Di Risio said the decision to add almost two square miles of retail space was based on the premise that the wider the net in the right waters, the wider the return.
"It responds to the logic of market penetration," Di Risio said. "Asia has more consumers, above all with respect to luxury, and is growing in an exponential manner....We are thinking of growth."
Di Risio declined to give financial forecasts for the year. But citing sales of 310.6 million euros, or $425.8 million at average exchange, in 2007, and debt at 20 percent of turnover, the ceo said now was the right time to invest in expansion despite the economic uncertainty — and without recourse to the markets.
"Versace doesn't need to list at the moment," Di Risio said. "We finance ourselves through regular lines of credit."
The first of the new boutique opens today in the Papillon Mall in Kuala Lumpur, Malaysia, with a second to follow in that city later this year. The other units are planned for Macau and two each in Hong Kong, Taiwan, China and Europe. Versace's global store count stood at 71 at the end of last year.
Di Risio said one of the boutiques in Hong Kong would be a 5,400-square-foot, two-level flagship on Canton Road, while another in Europe would be Versace's first unit in Milan devoted exclusively to the brand's home collection. All the stores will follow Versace's latest black-and-white design scheme.
Notwithstanding the drive to build new and long-lasting relationships with consumers in Asia, Di Risio said America remained important to Versace.
"The United States still represents for us a market where there is large growth, aside from the effects of the dollar, oil prices or the economy," he said. "We have yet to express ourselves and grow to our potential [there]."To wit, Donatella Versace will attend an exclusive launch of men's wear at Barneys New York on Wednesday.
Di Risio also said the company plans to consolidate its accessories business at 40 percent of sales, with a focus on watches and jewelry. "This will definitely be one of the segments that we start to push and grow in a very intense manner from 2008," Di Risio said.
He added Versace would open a second stand-alone watch store — the first opened in Rome last year — in Dubai at the beginning of 2009, and that the company was assessing stand-alone jewelry formats, taking a lead from Italian rival Gucci.
Versace also is charting other luxury waters — or skies. After signing an agreement with helicopter maker AgustaWestland last year, Di Risio said the first two Agusta-Versace choppers were ready for handing over to their European buyers. He added the fashion house had almost finished an Airbus 380 airplane and was planning other "residential" luxury projects.
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