Versace To Raise Price Points, Open Nearly 100 New Stores
Versace will increase its U.S. store count from 212 to 300 and increase its price points as consumers are engaging with the brand both in-store and online.
The Italian luxury brand generated $251 million in revenue in the third quarter, which was 29% higher than the year before. According to Versace’s parent company, Capri Holdings, its operating income was $32 million with an operating margin of 12.7%, compared to $13 million and 6.7% in the prior year.
“Much of Capri’s success came against a backdrop of robust consumer spending with shoppers eager to treat themselves to luxury clothing, accessories and footwear during the holiday period as they socialized more,” GlobalData Managing Director Neil Saunders noted.
“Gift buying was also elevated with high-end apparel featuring on the gift lists of more consumers than in the prior year. All of Capri’s labels benefitted from this trend, but as has been the case for a long time, some benefitted more than others.”
Capri Holdings’ Jimmy Choo brand also reported a 47% increase in revenue. Its operating margin swung to $16 million, following an $8 million loss last year. Michael Kors, meanwhile, saw its revenue rise by only 20%, but it still managed to beat analysts’ expectations.
“It is very clear what Jimmy Choo and Versace stand for; it is much more difficult to discern the essence of Michael Kors,” Saunders said on the Michael Kors’ lack of ubiquity and focus.
“In our view, the brand needs to work much harder at carving out a distinct positioning.”
That said, Capri Holdings is already working on rebooting the Michael Kors brand. It aims to boost sales of its MKGO activewear line and its menswear business to $500 million each. Last year, the company also hired luxury retail veteran Joshua Schulman as the brand’s new chief executive.
Still, the brand faces a long journey ahead, according to Saunders, as economic tightening in the coming months is likely to impact its ability to meet its ambitious goals.
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