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Versace: a new beginning

Versace was founded by the brotherhood of Versace's family, Gianni, Santo and Donatella. During the first decades of the company and brand, Gianni was the appointed designer of Versace. His taste for luxurious, and glamorous fashion has positioned him as an irreplaceable figure in pop culture, from the high-priced power dressing of the 1980s to the successful mix of ghetto and luxury fashion of the 1990s. His distinctive and sexy cut of garment, as well as his frequent references to Greco-Roman culture, have earned him a cult following of worldwide celebrities.


In 1997, Gianni Versace was murdered by a serial killer, which led his brother Santo to be appointed CEO of the company and his sister Donatella to replace him as creative director. That is when things started to become increasingly worse for Versace. Collections started to be far less successful, maybe due to a lack of experience from Donatella and her struggle with her cocaine addiction. Donatella deconstructs what her big brother has built about the brand's spirit in a quite abrupt manner. She originally stated:

I know who the Versace woman is because I wear the clothes myself

She had a very clear picture of what Versace stood for, but it was quite different from what the brand's enthusiasts were initially attracted by. The men's line has become less elegant, while the women's collection has become far less provocative. Customers began to go toward Gucci or Roberto Cavalli in order to find what they were looking for. Between 1997 and 2007, the brand's revenues decreased from 1 billion to 400 millions dollars. Assets were sold to subsidize the losses.


The Versace siblings recognized they could not operate the firm on their own and recruited outside managers. Their participation more than doubled the turnover, which went from 268 million euros in 2009 to 645 million in 2015. A great collaboration was formed between one particular CEO (Gian Giacomo Ferraris) and Donatella. He showed considerable respect for Donatella's imagination and vision as she began to find the appropriate balance for displaying Gianni's rococo sensuality in a modern way. She threw off minimalism and embraced street fashion with all of its energy and vibrancy. Moreover, many contemporary designers contributed to the resurrection of the greatest pieces from the classic Gianni's collections for a modernized version as a successful partnership with H&M in 2011 proudly displayed the return of Medusa motifs and Greek ornamentation as a sign of revival.

According to an article in the newspaper The Economist, a study from Bain & Co found that Versace is in
the top 10 of the most recognized fashion brands (8th place). This is really refreshing and promising for the brand’s future. With its rich and dramatic past, Versace has an opportunity to integrate their story into a strong brand and differentiate themselves. Versace’s family has already been mentioned numerous times in different media throughout the years, and this shows a real attachment of people to the story of the brand. For example, a 2018 TV docuseries, “The Assassination of Gianni Versace”, explore the murder of Gianni Versace. In addition, the brand or the Versace family have been mentioned in songs, such as Bruno Mars’s “Versace on the Floor”, Migos’s “Versace” or Lady Gaga’s song “Donatella”. 

Again, from The Economist in 2018, we learn one interesting fact, Versace's first line of product is generating 70% of its revenues. The remaining 30% of revenues are coming from the second line of product, which include homeware product and licensing such as sunglasses and fragrances. In general, a luxury company gets most of its revenues from the second line, but in Versace’s case it seems they have the benefits of having a strong first line, which most likely yields a far better margin. Happily, for Versace's family, it seems that the difficult time for their company is definitely over, and that the brand has successfully recovered to have a new beginning.


References

Huret, L., 2007. Versace. [Online]

Available at: https://www.tendances-de-mode.com/2007/03/06/87-versace

[Accessed 17 October 2021].

Leitch, L., 2018. Versace: the resurrection. [Online]

Available at: https://www.economist.com/1843/2018/03/15/versace-the-resurrection

[Accessed 17 October 2021].

Thomas, D., 2009. The Tragic Decline of the House of Versace. [Online]

Available at: https://www.newsweek.com/tragic-decline-house-versace-76845

[Accessed 17 October 2021].

Versace, 2021. Website's homepage. [Online]

Available at: https://www.versace.com/international/en/home/

[Accessed 17 October 2021].

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