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Versace Era Begins at Euroitalia

Poised for a double fragrance launch at Cannes Duty Free, Euroitalia's president, Giovanni Sgariboldi, is headed into a new era at a pivotal time in his influential company's development.

MILAN — Poised for a double fragrance launch at Cannes Duty Free, Euroitalia’s president, Giovanni Sgariboldi, is headed into a new era at a pivotal time in his influential company’s development. With the acquisition of the Gianni Versace beauty business still fresh in his mind, Sgariboldi is ready to unveil the first product of that new union, the Versace Man Eau Fraîche fragrance.

The first Versace fragrance launch by Euroitalia is being teamed with the introduction of another men’s scent — a fragrance called Friends Men, which will be marketed under Euroitalia’s Moschino brand — for a dual presentation to be made at the Cannes Duty Free show, which will begin Oct. 31.

Meanwhile, Sgariboldi revealed his plans for the new Euroitalia lineup in a rare and exclusive interview conducted at the company’s headquarters in Cavenago di Brianza, north of Milan. Sgariboldi shared his strategy for his firm’s future and details of the first Versace initiative after Euroitalia acquired the fashion house’s fragrance license in December.

Sgariboldi said Euroitalia has laid low for the past six months, busily working on integrating Giver Profumi into the business, while also preparing the new Versace and Moschino men’s fragrances.

“When we took over Giver, we spent six months examining the Versace brand and it has taken us up until this point to really begin with a plan for launching new products,” said Sgariboldi.

Versace Man Eau Fraîche is a flanker scent that’s derived from Versace Man, a 2003 entry. According to Sgariboldi, the new scent has helped to initiate a productive collaboration between the two companies.

“So far, that collaboration has been very intense, fruitful and worked extremely well,” said Sgariboldi.

In addition to creating new fragrances, Sgariboldi is determined to develop the Versace beauty and fragrance license into a stronger, fitter and more profitable brand. “If I have to tell the truth in this moment, I couldn’t say exactly what we plan to do with the brand,” Sgariboldi said when asked how Euroitalia will go about achieving those results. “Six months seems like a long time, but it is really brief.”

Prior to crystallizing a future strategy for the Versace license, Sgariboldi intends to examine every product in the Versace fragrance and beauty portfolio under the Euroitalia microscope.

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“After we have studied the different products and lines in the portfolio, we will make a judgment. We will value all of the products and study their potential to see if they have the possibility to grow or to see if we need to relook at them.”

Sgariboldi asserted that discontinuing Versace products was not and will never be part of the plan.

“We have already limited the portfolio to three women’s and three men’s fragrances. And they will stay. We won’t touch Versace cosmetics because it does impressively by itself. We don’t have a magic wand to transform the brand, but I want to stress that we don’t intend to cut a lot of lines from the portfolio,” he said.

Euroitalia also is assessing the priority of Versace’s distribution network, region by region and country by country. Sgariboldi noted that “areas like China and India are no more of a priority than the others — apart from the fact the brand is already present there. For us, it is a general discussion on the big global panorama.”

But, as Euroitalia faces a total structural reorganization internally, Sgariboldi said, scrutiny won’t be saved just for Versace.

“We have to analyze what we have and list the value of everything — and also [consider] whether that product is innovative on the market,” he said. “We are consolidating the company, studying the market and becoming lighter. We want to do well and we want to work well in every market.”

The acquisition of the Versace license comes at a crucial time in Euroitalia’s history, considering the industry speculation that has swirled around the Dolce & Gabbana fragrance brand — a business Euroitalia built into a powerhouse, but whose license is reportedly expiring.

While Sgariboldi declined to comment on the future of the Dolce & Gabbana fragrance license, many observers in the industry expect the designers to sign a new deal with Procter & Gamble, perhaps by the end of November. However, the brand is expected to remain in Euroitalia’s portfolio into next year.

It is thought that sometime next year, the license will change hands.

Euroitalia would not forecast its 2005 turnover, either, but, based on figures for 2004, the company could post $621 million in retail sales this year, not counting the new acquisition. Versace Profumi generated retail sales of $121 million in 2004.

Looking ahead, Versace Man Eau Fraîche will be launched at the same time as Moschino Friends Men.

Fittingly, Sgariboldi believes these fragrances belong to the two brands in Euroitalia’s portfolio that are critical to the company’s future expansion, and in turn, he is trying to grow them.

“The brands we are trying to grow at the moment are Versace and Moschino,” said Sgariboldi, adding, “we want to do that immediately, but it’s not possible.”

A roll-out strategy for both new scents will begin at the end of the month and continue through the beginning of next year, a plan that calls for 10,000 points of sale worldwide for both scents. Both are projected to be distributed in 1,000 doors in the U.S.

According to industry sources, Versace Man Eau Fraîche and Moschino Friends Men are expected to pull in $15 million and $10 million, respectively, in their first year of sales.

Created by Firmenich, Versace Man Eau Fraîche belongs to the aromatic-woody family and has top notes of lemon, rose wood and star fruit; middle notes of cedar leaves, tarragon and sage, and base notes of musk, amber and sycamore wood.

The bottle, which reflects the original design of Versace Man, is made of sky blue glass and is accompanied by sky blue, crocodile-skin-stamped packaging. The collection includes two sizes for the U.S. market: a 100-ml. eau de toilette for $65 and a 40-ml. edt for $50. The fragrance has a bath-and-body line, which includes a $30 aftershave balm, an $18 deodorant stick and a perfumed bath and shower gel for $25.

Moschino Friends Men, which is the brand’s third men’s fragrance, was created by International Flavors & Fragrances and is part of the citrus-wood family. The flacon was constructed from linear-shaped clear glass with a silver cap and designed by Moschino.

Moschino Friends Men features top notes of Calabrian bergamot, green mandarin and blood orange; middle notes of bourbon geraniums, Mediterranean sea breeze and petit grain of Paraguay, and bottom notes of cedar wood, vetiver and musk. The edt will be available in two sizes for the U.S. market, a 125-ml. version for $65 and a 75-ml. bottle priced at $48. The fragrance is accompanied by ancillary products such as aftershave for $35, a deodorant stick for $18 and a bath and shower gel for $25.