MILAN — Versace has experienced a 50 percent increase in watch sales since signing a license with Timex last November.
Capitalizing on the success, the house is reappraising its Precious Items division, which includes its watches as well as jewelry and writing instruments.
In addition to phasing out existing watch families by the end of 2006 and expanding the new DV One selection, Versace plans to launch another watch line under one of its secondary brands in summer 2006.
“As we are positioned in the high range of the market with the signature watch collection, this would be a means to bridge a market gap,” said Paolo Marai, general manager of Vertime, the Manno, Switzerland-based subsidiary created by Versace and American Timex.
Marai, who joined Vertime in April, attributed the boost in the watch segment largely to the innovative design and technology component of the DV One ceramic watch, introduced in April at Baselworld, the watch and jewelry fair. The bezel of the timepiece is also in ceramic, a first in the watch industry.
“We are banking on our 2005 star watch, the DV One, to further grow the category,” Marai said in an interview at Versace headquarters in Milan.
The DV One will be available in stores this month. In July, Versace offered a preview of the watch at the Beverly Hills, Paris, Milan and London Versace boutiques, with dedicated windows and a black-and-white glass cabinet specifically designed to highlight the watch.
As a further mark of the fashion content of the timepiece, actress Demi Moore wears the DV One in the new Versace ad campaign for fall-winter 2005.
“The combination of Swiss-made technology, Versace’s design and the 150-year-old history of Timex makes for a winning product,” Marai said.
The executive said the market reacted in a positive way to the 24-year license between Versace and Timex.
“There was always a strong appreciation of the Versace brand, but it was hampered by a feeling of uncertainty,” Marai said. “Retailers needed to have a long-term vision — after all, when they put their orders in, they invest no less than $18,000.”
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He underscored the difficulties of working with ceramic. The material is one of the most resistant available and is entirely hypoallergenic, but it also is expensive.
“Ceramic needs to rest in special ovens for six days and must be hand-treated with artisanal procedures,” Marai said. “For this reason, the production is quite limited.”
He noted that the material comes from Japan, the country most specialized in this technology.
The watch will be available at Versace boutiques and high-end luxury retail jewelry stores. The first two DV One models are available in black or white or in a gold-plated version.
Next year, the company is looking at launching a limited-edition DV One with Donatella Versace’s signature, as well as a pink model for Valentine’s Day.
Marai said the Precious Items category had sales of $9.9 million in 2004, with watches accounting for $7.6 million. Jewelry and pens accounted for the rest.
In 2005, the jewelry and writing instruments categories were suspended, and watches totaled $13 million.
At Christmas, however, Versace will present its new jewelry collection under the Vertime license. To relaunch the jewelry and pen divisions, Marai said Versace is working with new, specialized partners.
“We are moving production of jewelry from Switzerland to Valenza [one of Italy’s main jewelry production hubs] to mix technical competence and design,” Marai said.
“Jewelry is a fundamental component of the Precious Items division and is pivotal for our relationship with retailers.”
Marai plans to reach sales of $20.7 million in 2006 and $28.4 million in 2007.
“We want watches and jewelry to each account for 45 percent of sales, with pens making up the rest,” he said.
A ceramic pen could be the next step.
In 2005, the U.S. accounted for 30 percent of watch sales, registering between a 30 and 40 percent growth.
“The DV One was very well received in the U.S.,” said Marai.
Versace timepieces are available at between 1,300 and 1,500 points of sale around the world. In the U.S., the line is available at the New York and Miami Macy’s stores and at 300 other points of sale.
“We are aiming at 330 doors by the end of the year,” said Marai.
The DV One retails from $2,990 to $5,400. Marai noted, however, that price is not an issue.
“We’ve had a 70 percent increase in sales in terms of value and a 40 percent increase in terms of pieces,” he said.
“Our bestsellers are studded with diamonds.”