Versace Sees Significant Growth in 2015 as Price Decision LoomsAndrew Roberts
Gianni Versace SpA, the luxury-goods maker partly owned by Blackstone Group LP, forecast a repeat of last year’s double-digit sales growth in 2015 and said it will review pricing after Chanel announced plans to revise its policy.
“At this moment in time, the top line looks very encouraging,” Chief Executive Officer Gian Giacomo Ferraris said Thursday by phone. “Sales are going really well” and the company expects to benefit from the weak euro, he said.
Versace, which sold a 20 percent stake to Blackstone last year for 210 million euros ($229 million), joins Salvatore Ferragamo SpA in reporting a strong start to 2015 even as anti-graft measures weigh on spending in China. The maker of $525 Barocco-print belts and $3,995 fringed leather bags could sell shares in an initial public offering as soon as 2016 and is on track to reach revenue of at least 800 million euros by 2017, the CEO said.
“We haven’t fixed a date,” for an IPO, Ferraris said. “We are pursuing the process seriously.”
Revenue increased 17 percent to 548.7 million euros in 2014, Versace said, citing strong growth in North America. Earnings before interest, tax, depreciation and amortization reached 67.6 million euros.
While Versace hasn’t decided yet whether to decrease prices in Asia and raise them in Europe as Chanel plans to do next month, “we are watching our competitors,” Ferraris said. Any changes “to clearly balance the price range” could come in May with the delivery of the fall-winter 2015 collection, he said.
Chanel and Swiss watchmaker TAG Heuer said last week they will adjust prices globally because of currency fluctuations. A weakening euro has widened the gap between the price of items sold in China and Europe to an all-time high, with soft luxury goods such as handbags costing as much as 70 percent more in the Asian country, according to Exane BNP Paribas.
Versace plans to open as many as 30 shops this year, including a new flagship in Tokyo, after adding more than 40 directly operated stores in 2014. The investment shouldn’t impact the company’s ability to improve profitability this year, Ferraris said.