Versace Group aims to sell 20 percent stake
Troubled Italian luxury fashion house of Versace has been seeking a cash injection for more than a year. According to Reuters, Versace is selling a 20 per cent stake to an outside investor to fund growth and to enhance the brand. “They are fighting it out.” Chief Executive Gian Giacomo Ferraris said before Versace’s show in Milan recently.
U.S. funds Blackstone, CCMP and Bahrain’s Investcorp are the remaining contenders to buy the 20 per cent stake in the brand. The luxury house plans for an IPO in three to five years and is looking for a partner that will not interfere in day-to-day management. Versace will issue fresh shares as part of the stake sale, through which it aims to raise funds to open new shops and expand its product offering, especially its high-end “first line” clothing.
Under the current economic conditions and considering Versace’s deteriorating luxury stance, it seems unlikely that the sale of a 20 percent stake will have a long term effect on the ailing company which must re-invent its awareness (desirability) and positioning.