Monday, 1 February 2010
In the MO Down on October 30, we revealed that Versace was in crisis mode and set to cut 350 jobs. Now, finally, Versace’s restructuring plan has been announced and there are strong hopes that the brand will return to profitability in 2011.
According to WWD and Bloomberg, this restructure will still involve axing 350 jobs. However, Versace plan to launch lower-priced women’s wear called Versace Collection to bolster sales. This new range will be priced at 30 to 40 percent below the signature collection.
For more background information on ‘Versace’s new look,” check out this interesting article in the Wall Street Journal, written by the author of a soon-to-be-published book, House Of Versace.
This article raises some interesting points. We wonder how many times Versace can re-invent itself..? It has had many incarnations already, in its 32-year odd history. Gianni Versace launched the brand in 1978 and it has struggled ever since his death. As the WSJ article put it: "Versace's failure to grow since Mr. Versace's death has left it a minnow, at just a sixth the size of Giorgio Armani SpA, and one-twentieth the size of LVMH's fashion division alone.”
The article also pointed out, “Independent, family-owned fashion companies have come under pressure in the economic downturn. Large multi-brand groups such as LVMH and PPR have weathered the storm better... They have the deep pockets to continue to invest in opulent boutiques, pages of advertising and new product lines even during tough times.”
We’ll keep you posted on Versace’s reinvention and the reaction to its lower-priced range.
Who's behind the MO DOWN
Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury, www.moluxury.com.au