Versace’s global focus: an exclusive interview with CEO, Gian Giacomo Ferraris
Gian Giacomo Ferraris, Versace Group CEO, has recently spoken to CPP-LUXURY.COM about his company’s future strategy and opportunities for global expansion.
How has your company’s strategy changed since the acquisition of a 20 percent stake by Blackstone private capital?
At the same time nothing has changed and everything has changed. I say no change because Blackstone shared our vision for the brand’s global expansion. We spent a lot of time talking to our new partners before the deal, as we wanted to ensure that we had the same ideas and agreement on the fundamentals. So, nothing changes with regards to our goals and strategy to reach those goals. The capital injection, though, is enabling us to implement those strategies. And, this means that now everything is no longer as it was before.
Which are the key strategic business priorities for 2014?
As we said, the rationale for this deal is the development of our global business. Therefore, the number 1 priority is to expand our retail network. We plan to increase the number of directly operated stores from 137 today to more than 200 in 2016. We will also invest in the development of Versus Versace, a brand that we believe to have significant potential. Product-wise, accessories will be a key priority going forward. These, and others, are priorities for the next 3 years at least, not only for 2014.
What is your view on retailing through directly operated stores versus franchised stores? What has been your approach in this respect? Do you envisage future changes?
We focus on our directly operated store network for Versace, as we believe that a luxury brand is best represented in stores that are directly managed by the brand itself. In certain territories, where it would be difficult, if not impossible, for us to operate directly, we rely on selected partners of which we are generally quite satisfied. In fact, when it comes to lines such as Versace Collection or Versace Jeans, we couldn’t manage those businesses directly and we believe that relying on the expertise of our partners in those businesses is the right approach. We have no reason to change our strategy at present.
Which are your key priority markets in terms of expansion this year and 2015?
The great potential of Versace, which Blackstone immediately understood, is that we are still under-represented in many mature markets as well as emerging ones. To give you an example, in London we have only one store and we are looking for locations in Bond Street and other potentially interesting areas. In the United States, we grew 32% in 2013, and we continue to deliver spectacular growth this year. Obviously, we are looking at new openings in Brazil, Turkey, Russia, South Africa and the likes. But Versace has a lot of room for growth in Japan and Korea, which you wouldn’t quite define as emerging markets…
Has your overall business been impacted by the turmoil in Ukraine and Russia as well as the laws on anti-gifting in China?
We still enjoyed a strong performance in China last year, and we continue to outperform the market. As per Russia and Ukraine, we monitor the situation closely and hope for a fast and smooth conclusion. We haven’t suffered tremendously business-wise, but obviously, any such situation doesn’t contribute to a growing retail environment, to say the least.
Your company has a very diversified product range. Which have been the best performing and which do you plan to step up investments?
Versace is, historically, a ready-to-wear house. And, we are proud to report a solid performance in this category. But in order to grow, it was important for us to establish our credibility and to step up our accessories business. And, proudly again, I can tell you that our leather goods are becoming more and more important, to the point that 40% of sales is now made of accessories (licensed products not included).
How have your licensed businesses performed in the past year and what are your expectations of 2014?
Versace licensed products performed well in 2013, mainly thanks to a very strong result of our fragrances, which were up 23.6 per cent on the back of the successful launch of Versace’s new fragrance for men “VERSACE EROS”. Watches also grew and we expect continued growth for both categories in 2014.
The second Palazzo Versace is scheduled to open in Dubai next year. Tell us more about Dubai and future openings.
We look forward to the opening in Dubai. The first Palazzo Versace, which opened in Australia’s Gold Coast, is a great establishment, and we are constantly looking at opportunities that come to us from around the world thanks to the strong brand momentum. Last year we signed an agreement for the opening in 2017 of a Palazzo Versace in Macao. Palazzo Versace is something deeply rooted in the Company’s DNA, and it is something for which we have significant experience and know-how.
Do you plan to show at the upcoming Paris Haute Couture? How important is Atelier Versace for your company?
We are on the calendar, Sunday 6th July. Atelier Versace is part of the brand’s history and soul, it contributes to defining who we are, and we will continue to love and nurture this activity.