VERSACE TAPS EINHORN IN PUSH FOR EXPANSION
Byline: Alessandra Ilari / With contributions from Samantha Conti, London
MILAN — Gianni Versace SpA is bolstering its executive team as there are renewed reports it is searching for investors to fund its expansion plans.
Versace has named Jake Einhorn as executive vice president of U.S. retail, a new position, effective immediately through its U.S. subsidiary Prato Verde. Einhorn most recently was president of the U.S. division of Bottega Veneta, a subsidiary of Gucci Group. He will be based in New York.
In his new role, Einhorn will oversee all aspects of Versace’s directly operated stores including buying, merchandising, marketing, visual display, advertising and store operations. He will report directly to Giuseppe Celio, chief executive officer of Prato Verde. “We are delighted to have an executive with the stature, experience and reputation that Einhorn brings,” said Celio. “As Versace strengthens its presence in the U.S., Einhorn’s unparalleled knowledge of the U.S. luxury goods retail market will be instrumental in furthering our retail strategy.”
Prior to joining Bottega Veneta, Einhorn was vice president and general merchandise manager of Gucci America and, for three years, vice president and divisional merchandise manager at Saks Fifth Avenue. He also spent 21 years at Neiman Marcus.
The house of Versace, through Prato Verde, has 16 wholly owned U.S boutiques and six franchised ones. Worldwide, it operates 112 wholly owned boutiques and 89 franchises. But it’s no secret that global retail expansion ranks high on Santo Versace’s master plan. Last May, the president and chief executive officer of the family-run fashion empire told WWD exclusively that he planned to invest $90 million to upgrade and refurbish the company’s boutiques and corners globally and to purchase new machinery and logistics systems for the Versace factories. The moves were part of a plan to turn the company into a vertically integrated operation, controlling all aspects of production and distribution, by 2003.
At the same time, Versace stated that he wanted the company to remain independent and that seeking a stock marketing listing “wasn’t a priority.” He added that “the company will be in the position to build its own fashion group in the medium term.”
As reported in WWD in early March, the house of Versace dismissed talk that the firm was looking to sell a 25 percent stake to help finance a new retail and licensing strategy, making much of its relations with the investment bank Credit Suisse First Boston.
But there were renewed reports Tuesday that Versace is looking for outside financing and is in talks with such companies as Texas Pacific Group, Gucci, Doughty Hanson and CVC Capital Partners. However, industry sources stressed Tuesday that any deal is unlikely in the near future.
A Versace spokesman said Tuesday that the company continually evaluates interest from strategic and financial investors. “We’re currently executing a strategic growth strategy, focused on increased brand control, continued vertical integration initiatives and expanding distribution,” he said. “Specific initiatives include the repurchasing of franchises, significant investments in infrastructure, management and brand building and taking controlling positions in our production and distribution networks.”
A Texas Pacific Group spokesman declined to comment but sources said that TPG was interested and is actively looking at Versace. A spokesman for Doughty Hanson, a private-equity firm, declined to comment, but market sources said the firm was interested. Any negotiations remain in their early stages, however, they said.
A Gucci Group spokesman also denied comment, although industry sources said, “it’s very unlikely that Gucci has been contacted regarding the stake in Versace because a minority, passive investment doesn’t fit in with Gucci’s multibrand strategy.”
The renewed speculation comes as Versace is getting ready to announce its 2001 sales results, which are expected to exceed the $435 million mark at current euro exchange rates, with robust double-digit increases in various areas, according to a company spokesman. The growth is fueled by a cost-cutting operation started last year.
Carlo Pambianco, owner of a luxury goods consulting firm here, painted a similar picture, noting that this kind of financial operation would make sense only in light of a public listing or if the Versace family were to sell the firm. In that case, Pambianco said, the investor would have a way out and secure capital gain. “There’s has to be a way to make money, otherwise why settle for a stake that allows no control?” he said.