Versace, the Italian fashion house, made a loss last financial year.
Profits were almost halved, as margins were squeezed.
This could be attributed to the firm’s bold expansion program.
Versace opened around 35 stores and outlets. Whilst the move dramatically increased operating expenses, it’s a clear sign that the company is determined to grow.
And growth is important. Especially for a firm which has mooted on and off the idea of going public.
With stellar financial performances over the past couple of years, such talk got very loud. For instance, turnover grew by 33% in the EMEA market. However, with this recent set of results, we shouldn’t be expecting any market debut just yet.
But don’t dismiss the idea entirely: the company is 20% owned by private equity firm, Blackstone. And like all private equity firms, they want to see a return on their investment. And one possible exit strategy is a public float.
Awareness doesn’t mean purchase
One market analyst recently noted that whilst lots of people know about the brand, this awareness isn’t crystallizing into sales. Possible solutions could be a new product range (there’s talk of a new creative director taking the helm), more stores (well, the firm is already expanding), and a catchy marketing campaign.
But we could see purchases via WhatsApp
The digital upmarket fashion retailer Yoox Net-A-Porter is currently developing a platform which will allow shoppers to purchase Versace goods directly through WhatsApp.