Versace CEO sees growth slowing down in 2016
today Apr 21, 2016
Italian fashion house Versace sees 2016 as a tough year with slower sales growth as tourist traffic in European cities such as London, Paris and Brussels has been hit by security concerns and demand remains unstable, its chief executive said.
Versace, known for its glittering evening gowns and medusa logo, has been going from strength to strength since flirting with bankruptcy in 2004 and could be headed for a stock market listing when market conditions improve.
"I expect growth this year to be slightly below that of 2015," Versace Chief Executive Gian Giacomo Ferraris told Reuters in an interview on the fringes of the Conde Nast luxury conference. "It will be a tough year."
Versace, still family-controlled with Donatella at the creative helm, saw revenue rise 8.6 percent in 2015 at constant exchange rates in the year to Dec. 31 to 645 million euros ($729 million).
Its cautious outlook comes after several luxury groups including LVMH, Richemont and Burberry posted weak first-quarter sales, hit by lower tourist spending and depressed demand in key cities such as Hong Kong.
Ferraris said business in Europe was growing mainly thanks to local consumers as there had been a drop in buyers from regions such as Russia and the Middle East.
The chief executive credited with turning the company around and steering a course through family feuds, said next year was the earliest Versace could float as it had not started choosing advisers and not decided on where the shares would be listed. Rival Italian luxury brand Valentino has also said it was planning to float in 2017.
U.S. private equity firm Blackstone bought a 20-percent stake in Versace in 2014.
Ferraris said Versace was actively investing in social media and e-commerce, both in-house and with multibrand online retailers such as Yoox Net-a-porter.
He said he was in Seoul to develop the brand's business in Korea, the world's biggest duty-free market and No.8 luxury goods market. On Thursday, he was on his way to Japan, where he also saw solid growth prospects.
"I am quite optimistic about our growth in Asia," he said.
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