MILAN — Investments last year dented the Versace Group’s profitability on the back of increasing revenues, but the Milan-based fashion house on Monday expressed confidence in its strategy and growth potential.
In the 12 months ended Dec. 31, Versace registered a loss of 7.4 million euros, or $8.1 million, compared with a profit of 15.3 million euros, or $17 million, in 2015.
Earnings before interest, taxes, depreciation and amortization were halved to 44.3 million euros, or $48.7 million, compared with 81 million euros, or $89.1 million, in the previous year.
However, last year sales rose 3.7 percent to 669 million euros, or $736 million, compared with 645 million euros, or $709.5 million, in 2015. All product categories and channels performed well; in particular, the Asia-Pacific area helped boost Versace’s performance.
Dollar figures were converted from the euro at average exchange rates for the periods in question.
Investments were mainly channeled into the retail division and totaled 45 million euros, or $49.5 million, largely funded by internally generated resources. “To position the business for robust growth in the years ahead, the company undertook extensive management changes,” the firm said. “With a new management team and a clear strategy, Versace continues to invest in the brand, product, distribution and communication. We are confident that we are well-positioned to leverage the immense opportunity of this iconic brand.”
Versace’s own stores have for some time become the engine behind the brand’s growth, and now total 200. Last year sales at the retail division were up 4.3 percent to 418.1 million euros, or $460 million.
In May 2016, Versace went through a management shake-up, bringing in former Alexander McQueen chief executive officer Jonathan Akeroyd to lead the company, succeeding Gian Giacomo Ferraris.
At that time, Donatella Versace said Akeroyd was “a strong and savvy brand-builder with deep roots in retail, men’s wear and licensing, which will be important to the company as we increase our global reach.”
That wasn’t the only major change mooted at the house, however: Versace had been in talks since early this year with Riccardo Tisci about joining the company. However, as reported last month, sources say the deal hit a snag and talks between the former Givenchy designer and Donatella Versace have broken down.
Versace is also said to be edging toward an initial public offering, with Ferraris saying in 2015 that its process had started, although there was no timeframe set, except for the three- to five-year range first cited in 2014.
In 2014, Blackstone Group bought a 20 percent stake in Versace through a capital increase of 150 million euros, or $205.8 million, and acquired shares for 60 million euros, or $82.3 million, in stock from GiVI Holding SpA. 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. The Versace family holds the remaining 80 percent.