BIZCHINA / Overseas Investment
Versace makes big China push
(Shanghai Daily)
Updated: 2006-10-18 15:51
Gianni Versace SpA, the Italian fashion house named after its late
founder, will invest 10 million euros (US$13 million) to open nine stores
in China next year, seeking growth in the world's fastest growing major
economy.
The luxury retailer will also open 10 outlets of its VJC brand, which
targets the youth market, Giancarlo Di Risio, Versace's managing
director, said at a briefing in Beijing yesterday. About 40 percent of
the Milan-based company's planned investments for next year would be made
in China, he said.
China's luxury-goods market is growing as much as 60 percent a year and
has been targeted by luxury retailers such as Prada Holding NV, Bulgari
SpA and Valentino SpA. Versace, whose clothes are worn by celebrities,
including Britney Spears, is expanding in the country to offset lagging
sales in Europe, Bloomberg News reported.
"They haven't been very strong here - they've been low profile," said
Paul French, the editorial director of Shanghai-based market research
firm Access Asia Ltd. "Perhaps this move means they're starting to push
in China."
Versace said in July it planned to open 12 stores in the Chinese
mainland, Hong Kong and Taiwan by the third quarter to help boost sales.
The company had launched five outlets on the Chinese mainland alone as of
yesterday, spokeswoman Deirdre McCready said, denying that branch
openings were behind schedule.
An ACNielsen poll this year ranked Versace as the world's
third-most-desired brand after Giorgio Armani and Gucci. More than a
quarter of 21,000 online consumers in 42 countries said they would buy
Versace goods if money weren't an issue. Actresses Uma Thurman and
Jennifer Lopez wore the company's clothes at the Academy Awards in March.
The challenge for Versace in China, which opened its first store in the
country 12 years ago in Beijing, is that its designs may be perceived as
too "flashy for Chinese," market researcher French said. "Versace, which
is all about exotic colors and extreme designs, may be too much of a risk
to wear in China."
Donatella Versace, the company's vice president and creative director,
said at yesterday's press briefing that she was confident the company's
designs would suit the tastes of rich, modern Chinese.
The closely held clothier has sold unprofitable units, overhauled
management and taken control of distribution in Japan to compete more
effectively with Gucci Group and Giorgio Armani SpA. Di Risio also has
slashed seven licenses to focus on two main apparel collections, sped up
deliveries and boosted sales of higher-margin leather accessories.
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