MILAN — Versace plans to turn attention to men’s wear and Asia next year, as well as expand its jewelry and watch store format.
Gianni Versace SpA chief executive officer Giancarlo Di Risio said Tuesday that the company’s goal was to make Asia its second market after Europe, replacing the U.S.
"For an international brand, America is an important market," Di Risio said. "But our growth is global….America has represented our second market after Europe. Our objective in 2008 is to put Asia into second place.”
Di Risio said the jewelry project will be a vehicle "for major growth,” but declined to give specifics. The first jewelry and watch store opened in Rome this month. He also did not provide details on men’s wear.
Di Risio dampened expectations that Versace would go public soon, despite speculation that the company could join a wave of initial public offerings — including possible listings by Prada and Ferragamo next year.
"The stock market is not a necessity for us," Di Risio said. "At the moment, we retain that Versace must grow as it is. But it could be an opportunity we look at in the medium to long term."
In addition, the company is moving its headquarters under one roof as part of a leaner, more efficient operation. This "will be the first time Versace is in a single building," Di Risio said. "And it moves us closer to our historic seat."
Spread over five floors, the 65,000-square-foot structure is a short walk from Versace’s landmark atelier on Via Gesu. The home of the late founder Gianni Versace continues to house Versace’s showrooms and design studios.
"Everything has been done in-house," Di Risio said, referring to the refurbishment of the new palazzo on Via Borgospesso. "This was a strategic choice and reflects the culture of Versace today."
For Di Risio, the architect of Versace’s financial and administrative restructuring over the last four years, the move is more than a change of address. It represents the next step in the consolidation of the privately owned company.
Di Risio said Versace expected to close this year with sales "in excess of 300 million euros," or $408 million, up from 288 million euros, or $362.9 million, last year. Dollar figures are converted from average exchange rates for the period to which they refer.
He did not give profit estimates, but said the outlook was optimistic and the company would maintain a positive cash position.
Last year, Versace posted net profits of 19.1 million euros, or $24.1 million. Cash on its balance sheet totaled 11.3 million euros, or $14.2 million.
"Today, the company is in perfect financial equilibrium," Di Risio said. "We have zero debt," by comparison with more than 120 million euros, or $149 million, in 2004.
"The coffers are in a good state," he said.
Di Risio said the phasing out of various licensed product lines and the overhaul of Versace’s store network bit into first-half sales, but added that 2007 had been a good year.
"We have recovered all the turnover we lost from the license closures," Di Risio said, attributing much of that recovery to the growth of Versace’s accessories division.
In 2005, accessories accounted for 4 percent of company revenue. Di Risio expected the category to generate about 40 percent this year.