Versace Promises Other Successful Year While Preparing Its IPO
Versace stands out in the industry and announces spectacular results for the third consecutive year.It also confirms thatit´s going public in 2016, but does not say where.
Gianni Versace, the Italian manufacturer of luxury fashion, has announced that the year 2015 is being very positive for the company. Specifically, it expects sales to grow 14% over the previous year, exceeding €630 million, while profit will increase by 40% to€37 million. This increase in net income is even higher than last year, when it grew by 27%.
Several reasons explain this dramatic improvement. First, the strength of the dollar against the euro, which makes its products more competitive in terms of pricing. Second, the accelerated expansion after Blackstone´s investment in the company. Last year it opened 40 stores in premium areas like Fifth Avenue in New York or Galleria Vittorio Emanuele in Milan. This year it plans to continue its expansion with 30 new stores. Third and finally, it highlights the fact that the company has a much lower size than its competitors, which has benefited in trouble some markets such Asia.
In any case, Versace CEO Gian Giacomo Ferraris has admitted that both China and Russia are worrying markets today. In fact, despite the good figures, the company has been penalized by the global economic situation. It had to abandon its 2013 target of doubling sales in three years (by 2016); now it estimates to reach that goal of €800 million in revenues a year late (2017) at the earliest.
Preparing the IPO
On the other hand, the company has also offered more details about the IPO is preparing. Versace has not yet decided where to start trading, but it may be inclined to United States or Asia, and definitely will be held in 2016. Prada, as example, decided to list in Hong Kong to take advantage of the absence of big names of the luxury industry in that market.
Versace accumulates four year sofgood results after a long crisis that began in 1997 when its founder, creative director and principal shareholder, Gianni Versace, was murdered. Blackstone last year paid €210 million for a 20% of Versace´s shares.