Lojas Riachuelo expects its fledgling Versace capsule collection to sharply boost sales at a time when Brazil’s apparel consumption is taking a hit from a sagging economy.
“This is our biggest bet yet,” said Flavio Rocha, the Brazilian department store chain’s chief executive. “It’s the first international designer we collaborate with.”
Rocha said Riachuelo negotiated the contract with chief designer and vice president Donatella Versace for two years. He said Versace, which recently took over its Brazilian franchise business, has seen “huge growth” in the country in recent years.
Rocha would not provide sale projections for the line, launched during São Paulo Fashion Week last month. It features 400 women’s garments, including brightly colored dresses and elegant evening wear, Neoprene cropped tops and the Italian fashion houses’ signature pencil skirts.
He said sales for past collaborations, including one with top Brazilian label Osklen, have not exceeded more than 1 percent of the firm’s annual revenues.
However, “we expect this collaboration to sell much more,” Rocha said, adding that a first rollout will see 500,000 garments hit the apparel-focused chain’s stores.
Riachuelo, which opened its 241st shop in Curitiba on Friday, had sales of $2.4 billion last year and expects revenues to grow 10 to 15 percent annually until 2017. The retailer has earned Rocha and his family’s Guararapes textile holding — an estimated $1.9 billion fortune.
The Versace collection, faced by Brazilian top-model Adriana Lima, will retail for 49 to 399 reals ($19 to $156) and is part of Riachuelo’s strategy to “democratize fashion” in Brazil, where a recent economic bonanza has spurred a booming middle class.
As Brazil’s economy sags, retailers are scrambling to shore up sales through savvy marketing actions.
Perhaps that’s why C&A also unveiled a Stella McCartney capsule collection earlier this month.