VERSACE’S NEW FLAGSHIP TO BE CENTERPIECE OF U.S. EFFORT
Byline: Mark Tosh
NEW YORK — Gianni Versace will spend at least $6 million to build his Fifth Avenue flagship, which will be a “complete showcase” for his expanding product line and the cornerstone of his U.S. drive to build sales.
“We have worked very hard in the U.S., but we don’t think we’ve reached our potential,” said Santo Versace, chairman and general manager of Gianni Versace SpA, and the designer’s brother.
Versace outlined plans and goals for the flagship in an interview Friday at the St. Regis Hotel here. He was in New York finalizing plans for the store.
He said Versace has reached just 20 percent of its sales potential in the U.S. and that growth will come from up to seven new stores opening this year, and from new products, particularly fashion accessories, cosmetics, fragrance and home items.
In addition, Versace is planning to increase his business with department stores by distributing to more doors and adding selling space at existing doors, according to Versace officials. The designer’s labels will be sold at more Neiman Marcus and Saks Fifth Avenue stores. At the Saks flagship here Versace expects to increase space for his signature women’s collection on three, jeans on the second floor and men’s wear on six. Advertising is also on the rise. “We started last year to invest more in advertising, and we hope to increase it more and more,” Versace said in the interview.
The big retail push begins with the flagship. It’s scheduled to open in late October, at 647 Fifth Ave. between 51st and 52nd Streets, and at 25,000 square feet will be the largest Versace store in the world. Santo Versace said the cost to prepare the flagship will be between $6 million and $7 million. It involves renovating and reconstructing parts of the former George Vanderbilt residence, which was built in 1905. The designer signed a 20-year lease for the five-story building, which previously was home to Olympic Airways, and has an option for another 20, Versace said.
“It’s important for us to have our largest store in Manhattan,” he said. “Manhattan is the first place for shopping, and when people think about shopping on the streets in New York, they think about Fifth Avenue.” Describing the layout, Versace said accessories will be showcased on the main floor, with different categories, such as women’s shoes and men’s ties, receiving their own “corners,” or shops within the shop.
Floors two through five will feature the women’s, men’s and home collections, as well as a youth-oriented collection. The specific floors for each line have yet to be determined, Versace said.
The roof will be a terrace or possibly a cafe, he said. The two basement floors will house inventory, and possibly another accessories area, he added.
Italian architects Rocco Magnoli and Lorenzo Carmellini of Laboratorio Associati, who have worked on several of the designer’s shops, have been retained to work on the building, which has been vacant for about 18 months.
“It’s an opportunity to show the integrity and totality of Gianni Versace,” said the designer’s brother. “We now have the right space to show all the merchandise.”
He declined to project sales for the flagship but said he expects it to break even within the first 12 months and eventually become the house’s largest-volume unit. In North America, including Canada, Versace’s annual volume is estimated at about $55 million, or about 20 percent of the Milan-based group’s total sales.
As reported, Versace plans to open shops to showcase his signature collection on Newbury Street in Boston and in South Coast Plaza, Costa Mesa, Calif., in March, and in July at Dallas’s Galleria.
At least two additional Versace Jeans Couture shops are scheduled to open this year, including units in Washington D.C. in March and White Plains, N.Y., in July. By yearend, the designer expects to have 17 signature boutiques, five Versus units and five Jeans Couture units in the U.S.
Versace believes there is enough business potential in Manhattan to keep operating his men’s and women’s shops at 816 and 817 Madison Ave. even after the flagship debuts, he added. The designer also operates multiple locations in Milan.
Versace has a 10,000-square-foot unit on Via Montenapoleone in Milan, a 12,000-square-foot shop on Rue du Faubourg St. Honore in Paris and a 15,000-square-foot unit on Bond Street in London. According to Versace, all of the units are profitable.
He downplayed the possibility that the flagship will siphon off his business at department stores. “People like to buy at Saks,” he said. “Gianni likes to buy at Saks.”