NATIONAL:Italian luxury fashion house Gianni Versace is preparing to re-enter the Australian retail market - less than one month after domestic license holders shut down its network of domestic stores.
Several sources connected to the fashion house have said retail sites in Melbourne and Queensland could re-open as early as September 2009. As reported in the March 27 edition of Ragtrader, Gianni Versace boutiques across Australia had closed by the end of the month after regional licensee Zestland failed to renew its contract. Around 70 retail and head office employees were affected by the closures, with four stores shutting down as a result of the decision.
However it was understood a former director of Zestland, Malaysian-based Kiat Seng Hll (John Hll), had since established his own company and renegotiated terms with Gianni Versace executives in Milan. This meant new stores carrying the couture autumn/winter 2010 collection would open in Melbourne's Crown Casino complex and Queensland's Palazzo Versace complex by the end of the year.
Late last month, News Limited portal goldcoast.com.au hinted the Queensland site would be "closing for a while" and reopen when new licences had been negotiated.
However, local sources claimed the prospect of a Sydney store was "highly unlikely", with operations there largely to blame for the nationwide shutdown.
"Sydney is an ideal city to have a brand like Versace but it is a very depressed market right now," one source said, adding that plans to close (now defunct) stores in the CBD and Bondi Junction were already underway in October, 2008. "There were many issues with the stores in Sydney ? the new deal gives [the brand] a fresh start with its two best stores in Australia."
One source claimed Melbourne would house the brand's new flagship site, with an "exceptional" concept store planned for the city.
Closing down sales had also meant Gianni Versace was able to "clean out" existing inventory. The stores carried a range of first line (Gianni Versace) men's and women's wear and merchandise, along with a selection of second line (Versace Collection) menswear.
The closure of Gianni Versace stores had not effected wholesale operations for the Versace Collection, with ten multi-brand boutiques across Australia and two across New Zealand still carrying the line. The homewares, eyewear, fragrance and Versace denim collections had also continued to trade on in the Australian market.
In its latest profit announcement, Versace chief executive Giancarlo Di Risio said the fashion house had ambitious expansion plans for the current calendar year including new boutique openings in Dubai Mall (United Arab Emirates), New Dehli (India) and Shanghai (China). This followed store openings in Jeddah (Saudi Arabia), Dallas, Texas (United States) and Harbin (China) over the last quarter.
Di Risio said the house had invested $US59.2 million ($A83 million) towards retail expansion in 2009.
Versace recorded a 30 per cent decline in net profit to $US11.8 million ($A16.6 million) last year ? a move the company attributed to a period of increased investment in the Asian market, non-recurring charges and sharp fluctuations in the exchange rate.
Profits before taxes and charges fell 5 per cent or by $US2.5 million ($A3.5 million) from 2007 to $US34.7 million ($A48.7 million) in 2008. Group sales over the year, however, grew by 8 per cent to $US442.3 million ($A620.8 million).