Milan—Gianni Versace SpA today reported it is well positioned for a strong 2014 coming off a 2013 where net profit rose 28%.
Helped by sales in Asia and the United States, Versace posted a net profit of 10.9 million euros last year. Net revenue rose 17% to 479 million euros (about $660 million) thanks to a 32% increase in the United States and a 19% increase in Asia.
Boost from Blackstone Stake
Its operating profit, (adjusted for currency fluctuations), rose 60% to 71 million euros. “The rise in (operating profit) is an important result,” said CEO Gian Giacomo Ferraris, adding that it was the fruit of improvement in the company’s supply chain, among other changes.
Ferraris has spearheaded a turnaround for the company which nearly went bankrupt in the mid-2000s. Now private equity group Blackstone took a 20% stake in the luxurygoods company ahead of what may be a stock listing. With the 210 million euros it received from Blackstone, Versace is likely to expand its network of retail shops.
The company’s 137-directly owned shops accounted for nearly 56% of 2013 sales total and plans call for 200 shops within three years.
“The main engine of the company’s growth continues to be the Versace Prima Linea (high-end collection), which accounts for 60 percent of overall sales,” the company said in a statement.
Ferraris predicted that the real impact of the Blackstone deal would likely be visible in 2015 although he forecast a double digit increase in sales for 2014
“This year will be devoted mainly to investment, so the real impact of such investments will come next year particularly, but also in 2016,” Ferraris said. For instance, Versace plans to double the contribution from its e-commerce business this year.
For its 2013 sales by category, its high-end Versace Prima Linea accounts for 60% of overall sales, the company said. Fragrances were up 24% and watches up 16%. Wholesale sales were also up 17%.