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Versace Gets New Headquarters

Giancarlo Di Risio told WWD that the Italian company would transfer to a new Milanese base in June, reflecting a leaner, more efficient operation.

MILAN – For the past few years, Versace has been putting its house in order. Now, the luxury goods brand is moving its headquarters under one roof.

Gianni Versace SpA chief executive officer Giancarlo Di Risio told WWD on Tuesday that the Italian company would transfer to a new Milanese base in June, reflecting a leaner, more efficient operation.

“It will be the first time Versace is in a single building,” Di Risio said. “And it moves us closer to our historic seat.”

Spread out over five floors, the new 65,000-square-foot edifice is a short walk from Versace’s landmark atelier in Via Gesu. The former 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 in 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 just a change of address. It represents the next step in the consolidation of the privately owned company, which continues to post improving results.

Di Risio said Versace expected to close 2007 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 the euro at 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.

In 2006, 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.”

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 that in spite of this, 2007 had been a good year overall.

“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 approximately 40 percent this year.

Looking ahead, Di Risio said Versace would focus on its menswear business in 2008 and expand its jewelry and watch store format, the first of which opened in Rome earlier this month.

Di Risio declined to give specifics but said the jewelry project would be a vehicle “for major growth.”

He was also confident that sales of Versace merchandise would advance worldwide next year, indicating that the company’s objective was to make Asia its second market after Europe, replacing the US.

“For an international brand, America is an important market,” Di Risio said. “But our growth is global.”

Despite repeated speculation that company could join a wave of initial public offerings – including possible listings by Prada and Ferragamo—Di Risio dampened expectations that Versace would go public any time soon.

“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.”