Italian Fashion House Versace Sells Stake
Everyone who is anyone is intimately familiar with the name Versace, and there’s a reason why. The Italian fashion house has been around since 1978, when it was founded by Gianni Versace in Milan. Acclaim for the fashionable name was immediate, as people were enamored with the high style and impeccable attention to details that made the brand popular.
When the original founder passed away in 1997 in a random act of violence outside his personal residence, Gianni’s immediate family stepped in to fill the vacated role. Versace’s sister, Donatella, became creative director while his brother, Santo, took on a more active role to become Chief Executive Officer; Allegra, Donatella’s daughter, owns 50 percent of the company and is an influential board member.
The brand lacked power after the murder of Gianni, however, and was unable to gain the force it once had to push the house any further; the proverbial wind in the sails was gone. They started turning a profit again after more than a decade, reporting an increase in sales in 2011. Versace, however, still lacked the funding and financial backing it once had to return to the glory days, especially in markets overseas.
To combat this financial problem, Versace announced that they were selling a 20 percent stake in the company to Blackstone, a private equity firm that specializes in global investments and financial advice. The sale means Versace not only gains financial means, but also the influence over fashion markets that Blackstone can provide.
Santo and Donatella, the two siblings at the helm of the ship, say they want to keep creative control of their business instead of giving it up to others that might be able to advance the company further. Some critics see this as a hampering maneuver that has kept the brand floundering over the years, but the Versace clan remains unaffected by naysayers.
Versace is also planning an initial public offering of the business within the next five years, a strategic move that will come to light only with the help of Blackstone’s investment. The Italian fashion house is also planning to expand it’s 137 stores to at least 200 in the years to come.