MILAN — In further restructuring moves, Versace is shifting its resources and focus from couture to its bourgeoning pre-collections and main ready-to-wear line.
The company said that, starting in July and for an undisclosed time period, it will no longer show during the couture seasons in Paris, but will sell to atelier clients from its Milan headquarters.
Versace said the decision will allow it to accelerate the development of its pre-collection business by allocating additional resources to the various departments: design, sourcing, production, merchandising and delivery.
“Our women’s business is coming off two strong back-to-back seasons,” said Daniele Ballestrazzi, Versace’s interim chief executive officer, in a statement. “Through the beginning of May, retail sales for the spring-summer 2004 main collection are up 28 percent, while wholesale revenues for fall-winter 2004 grew 22 percent over the previous year.”
Ballestrazzi added that Versace felt the need to reallocate resources to improve profitability and strengthen the company across the board.
To underscore the move, Ballestrazzi said that, starting with spring-summer 2005, the pre-collection and first line will be renamed Main Collection and Runway Collection, respectively, and will be conceived as consistent collections.
The Main and Runway collections are expected to generate 65 percent and 35 percent of seasonal revenues, respectively, Ballestrazzi noted. As part of the new strategy, an expanded women’s wear Main Collection will be shown in June alongside the men’s collection.
The moves also are expected to result in more timely production and delivery schedules, cost efficiencies and better sell-throughs for Versace’s wholesale partners and fully owned retail operations.
To further pump up the volume, Versace is upping its advertising budget by 20 percent for the second half of the year. While Versace declined to comment on the amount it spends overall on advertising, an industry source estimated the additional investment to be in the league of $1.2 million. Targeted markets include the Far East, Italy, the U.S. and Russia.