Fashion may have its peculiar ins and outs, but to Versace’s Chief Executive Officer Gian Giacomo Ferraris, the actual business of fashion is not entirely rocket science. “The concept is very basic,” he says, when we meet at the unveiling of the brand’s new Hong Kong boutique at the upmarket Tsim Sha Tsui district. “You need to have distinct and unique designs, deliver excellent quality and showcase [your] product in the right environment.”
A 27-year industry veteran — “Yes, I’m old,” concedes Ferraris with a laugh — the former Jil Sander CEO, who took over the reins of Versace in 2009, has pinned triumphing in the fashion arena down to a formula. “Our way of communicating the product is through a flagship store,” he says of the brand’s approach to market penetration. “It serves as a 360-degree representation of the brand’s fashion, luxury and lifestyle products — just as you see here.”
At 732sq m, the boutique at Gateway Arcade is Asia’s largest and, like the house’s recently opened Milan store, boasts interiors conceptualised by renowned British architect Jamie Fobert and Creative Director Donatella Versace. It is everything you would expect from a fashion house known for its flamboyance, with classic Italian architectural elements such as Byzantine mosaic juxtaposed against contemporary materials such as Plexiglas and Perspex. “It is a contrast between the past and the future, and expresses the company’s new strategy,” he says of the design.
This strategy, he elaborates, centres on product categories (and even interior architecture) steeped in the bold, opulent Italian flavour that defined the Gianni Versace era — but with a 21st-century touch. “This is what we inherited from Gianni and his legacy is fundamental,” he states.
Ferraris’s move to leverage on Versace’s storied past and the cost-cutting regime he introduced in 2009 has shown healthy results. From being at the brink of bankruptcy in early 2000s, Versace returned to profitability in 2011 and in 2013, declared a revenue of €479.2 million ($781.6 million). And in a sure sign that it is back on track, the Milan-based powerhouse made headlines last year for selling a 20 percent stake in its company to New York private-equity fund Blackstone Group. The deal valued Versace at approximately €1 billion and saw Blackstone acquiring €60 million worth of company stock, while injecting €150 million of fresh capital into the fashion house to help finance its continued global expansion.
He reveals that the family chose to work with Blackstone (over the other private equity firms that took part in the bidding process, including CCMP and Investcorp) because “they were the ones that matched our business plan”.
Still on a roll, Ferraris is now gearing up the fashion house for an initial public offering in three to five years’ time. But before the brand can be taken public, it needs to be shipshape, he says. The house has begun gradually withdrawing distribution rights from agents across markets such as Australia, Japan and Korea, and re-entering them with its own management teams. This not only allows Versace to control the calibre of its products and the manner in which they are presented (hence protecting the brand image) but also gives it a bigger share of the profit pie. The company has also stepped up investments on the digital front — which includes social media and e-commerce channels — in hopes of reaching out to this generation’s increasingly tech-savvy customers. Also on the agenda is global expansion. In the month following the Hong Kong store opening alone, new boutiques in São Paulo and Rio de Janeiro will add to Versace’s Latin American footprint.
Of course, these initiatives would not amount to anything if not for the label’s well-executed designs. And Ferraris, needless to say, is full of praise for its creative director. “I admire her capability to set trends while understanding the needs of the customer and translating it in a modern way,” he says of Donatella.
A classic example is Versus, the diffusion line gifted by Gianni to Donatella back in 1989. Though it started out being known for its rock-chic, exuberantly sexy aesthetic, the line has since evolved to embody a more contemporary vibe, thanks to collaborations with the likes of Christopher Kane, JW Anderson and rapper MIA. Versus’s most recent collaborative collection with Anthony Vacarello is, at time of conversation, almost all sold out.
Having bounced back from its days of financial turmoil, Versace is now enjoying consistent double-digit growth. Ferraris, however, is not one to rest on his laurels. “The Versace group still has the capability to grow,” he notes, hinting that his job is far from done. “It is our mission to complete the gap that we’ve had [in the market] since the murder of Gianni.”
Style maven Susanna Han poses a few questions to Versace CEO, Gian Giacomo Ferraris
Versace has always been known for its rebellious, rock-and-roll fashion. How does it strike a balance between attracting young, new customers and keeping its existing clientele happy?
The secret lies in having a unique, very credible and experienced creative director like Donatella. She has everything under control and is able to spread the brand DNA across Versace’s lines but still completely maintain [the distinct style that the brand is known for]. Also, we have Versus, which is more approachable and contemporary [compared to the main line]. It is a platform for us to attract younger customers with a slightly different product and slowly invite them into the Versace world.
This year, Versus’s collaboration with Anthony Vacallero was highly well-received. Are there any other collaborations that we can look forward to?
Yes, always. Versus is a digital, non-seasonal collection and it is our mission to constantly work with new and young collaborators from designers to musicians; it’s always interesting who it will be. It’s still a secret who we are working with next, because we have not signed [the contract] yet — but, for sure, we will be working with someone new.