VERSACE

The product strategy and mix in Versace marketing strategy can be explained as follows:

Marketing Mix

Product

Versace always believed in offering modern and fashionable products starting from
its beginning.

Versace came into existence in 1978 under the name ‘ Gianni Versace Donna’ The brand
started by launching clothing for both men and women, but now it has moved to jewelry,
accessories and home furnishings.

After the death of Gianni Versace, Donatella Versace took the ownership in hand and

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introduced ‘Young Versace’ and ‘Versus’ in 1993. The brand enjoyed a global success,

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Versace designs customized products for famous celebrities ranging from Prince of

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Wales to Hollywood celebrities like Jennifer Lopez. The products designed by Versace are

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known for their unique products and the latest and trendy designs which set up a new style
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statement in the world of fashion.
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Price
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Versace has placed itself in the premium section targeting high end segment of the
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society. Versace attracts people with urban style lifestyle and people with high purchasing
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power. At the end of the financial year 2016, Versace posted its revenues at Euro 669
million.
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Place
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Versace manages the commercial presence and sales activities of the Versace fashion
house in Italy and across the EMEA, APAC and American Regions through the Sales,
Distribution, and Retail departments. Till 1991, Versace stores were limited only to , The
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first Versace boutique to open out of Italy was in Glasgow, Scotland. After that, Versace
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continued to expand globally. Versace now distributes its products using a world-wide
network including more than 180 boutiques and 1500 whole sellers. In 2015, Versace
joined hands with H&M and released a new clothing and accessory line which are being sold
in H&M stores.

Official website for clothing that offers distribution and purchasing facilities in several
countries even where the brand does not have an outlet. This has helped in making a huge
difference in its sale figures.

In the year 2015, it collaborated with little buck to launch an exclusive line of sneakers.

Promotion

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 Though the brand does not require any media to promote itself as its name is only sufficient
but still Versace has paid a lot of attention towards making it a synonym for luxury. The
logo of Versace Greek mythological figure, Medusa is equally catchy as well as lavish to
make an impact on people. Versace being the brand for celebrities has directly or indirectly
was promoted by these celebrities throughout its journey. The collection ‘Young versace’
and ‘Versus’ introduced by Donatella Versace in 1993 enjoyed a widespread international
coverage for its ‘Black Versace dress of Elizabeth Hurley’. Versace started with sponsorship
and partnership to promote more. It made a partnership with Lamborghini in 2006
producing Lamborghini Murciélago LP640 VERSACE. The interior of the car was the work
of Versace. The interior of the car was designed by Versace with car seats embroidered with
Versace logo. To keep the exclusivity, only 10 units of the car were produced. In 2008,
Versace teamed up with AgustaWestland to create the AgustaWestland AW109 Grand
Versace VIP luxury helicopter. The helicopter had Versace leather interior and a design on
the outside. It also came up with Versace Residencies to promote the luxurious brand
name.

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In the year 2015, Mind Group firm from China and Versace entered into a deal to design

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luxury residential towers in China that would be known as Versace Residencies. The brand

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also started with the luxurious hotel chains to keep their visibility high for the premier

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segment of the society. Versace also conducts and sponsors various fashion show to show
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their unique and bold designs. The company is also utilizing the social media to promote via
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official Youtube channel, official Facebook page etc. This completes the marketing mix of
Versace.
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As Versace is a brand especially for celebrities it has been in limelight both directly and
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indirectly via these famous personalities. The brand is worn and endorsed by some high-
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profile celebrities to project its image in the fashion industry. Dresses have been designed
for Elizabeth Hurley, Michael Jackson, Elton John, Princess Caroline of Monaco and
Princess of Wales.
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In the year 2000, Jennifer Lopez wore green Versace dress at 42nd Annual Grammy
Awards and was named fifth most iconic dress of all times and in the year 2008, Elizabeth
Hurley’s dress was voted at first number in a poll conducted by Daily Telegraph.
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SWOT ANALYSIS
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Strengths

Below is the Strengths, Weaknesses, Opportunities & Threats (SWOT) Analysis of Versace

1. Versace offers exclusive, breathtaking and intricate collection of clothes

2. Versace have about 80+ exclusive boutiques worldwide as well as their main
headquarters in Milan, Italy
3. Very well established brand image and recognized globally
4. Offers a wide range of high quality and original luxury goods
5. Versace brands are worn and endorsed by all celebrities who enjoy looking sophisticated

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 6. They have about 500 employees containing an expert team of designers and stylists
7. Product portfolio also includes perfumes, watches and even mobile phones
8. Since its inception in 1978, Versace has maintained a classy and strong legacy

Weaknesses

Here are the weaknesses in the Versace SWOT Analysis:

1. Fake imitations or replicas affects brand image of Versace
2. Due to tough competition there is a high amount of brand switching and restricted market
share growth

Opportunities

Following are the Opportunities in Versace SWOT Analysis:

1. Online Retail and E-marketing are gaining large amount of importance and can be tapped

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by Versace

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2. Demand for luxury goods is always rising as people love looking striking and sharp

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3. Innovative and stylishly designed products can be introduced

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4. Global expansion to emerging economies where people have high purchasing power and

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are affluent rs e
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Threats

The threats in the SWOT Analysis of Versace are as mentioned:

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1. Economic recession and downturn has an impact on purchasing power of individuals

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2. Other cheaper and lower brands trying to copy their classic designs and selling at much
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cheaper rates
3. Growing competition can cause Versace's business to reduce
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CUEGIS CONCEPTS
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Ethics

-Versace fur free

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-Promoting sustainability in Italian fashion

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-Sustainable Boutique
-Sustainable at the Met Gala with Gisele
-The Green Carpet Awards
-Building a culture of sustainability
-New sustainable concepts

The Versace Group will give high priority to the application of the Ethical Code, ensuring that
there are sufficient resources available in terms of information, prevention and control as
well as guaranteeing transparency in related operations and conduct and will not hesitate to
intervene, where necessary, with corrective actions.

Versace inaugurated the charity Gala “Rock’N Rule” with profits given to the Amfar anti-AIDS

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 Association.

Effect of a decision on Stakeholder:

Versace released a clothing line suggesting Hong Kong and Macau were two separate
countries sparking controversy in China. This resulted in them releasing an apology,
destroying the clothing line and one of their brand ambassadors from China Yang Mi ended
her association with Versace.

Ethical Code

The Ethical Code is a working resource in its own right and represents a reference point for
all Group stakeholders. The purpose of the Ethical Code is to ensure the application of
propriety, fairness, integrity, honesty and professional discipline to the operations, conduct
and manner of working used both in relations internal to the Group and in relations with
external parties, ensuring that attention is always focused on compliance with the laws and

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regulations in the countries in which the Group operates in addition to compliance with the

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business procedures of the Group itself.

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The Group will protect personal values. In this context, no conduct of a discriminatory nature

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will be tolerated nor will any form of personal or sexual harassment, molestation or offensive
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behaviour be permitted. Versace thus guarantees that there will be no room in the work-
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place for any form of discrimination based on age, sex, sexual orientation, race, language,
nationality, political or trade union opinions, religious beliefs or other personal characteristics
not relating to work. This leads to more employee satisfaction, and less government
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intervention.
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Into the Group employee are hired with regular employment contracts and is not tolerate any
form of illegal labor. It is forbidden to hire foreign workers without a residence permit and/or
take out term contracts with deadline over duration of residence permit. The Group doesn't
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employ any form of forced labor, compulsory or child labor, doesn't employ people younger
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than the age laid down for starting work by the legislation of the place in which the work is
performed. The Group is also committed to not establishing or maintaining working
relationships with suppliers that employ child labor.
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5.1 Environmental protection into work processes

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Environmental protection is to be fostered in the overall approach to business. The Group is

committed to improve continuously the environmental performance of the quality systems,
production processes through the monitoring of the legislative and regulatory provisions.

5.2 Environmental impact and product safety

The Group is committed to producing and selling, in compliance with legislative and
regulatory requirements, products with the highest standards in terms of environmental
performance and safety. Also it works to develop and implement innovative technical
solutions to minimize environmental impacts and ensure the highest safety.

Relations with Public Institutions

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 Relations with public bodies or organisations necessary for the development of the Group’s
programmes, will be reserved exclusively to the business functions with delegated powers in
this area. Relations must be characterised by the greatest possible transparency, clarity and
propriety and must be of such a nature as to avoid partial, false, ambiguous or misleading
interpretations by the public institutions with which the different kinds of relations are
established.

Innovation

One of the most innovative fashion designers of the 20th century, Gianni Versace (1946-
1997) startled the world with his clothes made from metal, plastic, and leather, and delighted
ballet and opera lovers with his stunning theatrical costumes. Versace socialized with
celebrities, who loved and wore his expensive clothing.

In this collection he displayed his famous metal garments, now a classic feature of his

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fashion. His metal mesh dress was inspired by the punk fashions he saw in London in 1980.

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To develop the mesh material, Versace worked with German engineers. In later collections,

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metal dresses were made in bright colors. In the 1980s, Versace introduced another

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technological innovation, the bonding of leather to rubber using lasers.

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Versace collaborated with the Teatro ala scala and designed costumes for the ballets. He felt
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his involvement with costume design gave his clothing new attitude. There was even a
dance created in honour of the launch of Versace’s new fragrance, “Versace l’Homme”.
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Versace and Experiment" in the fourth gallery presented new materials, including plastic
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dresses, leather, including the 1992 "bondage" collection, and the metal-mesh dresses.
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Italian fashion house Versace has become the first major luxury brand to make all its ranges
available to buy direct online.
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The fashion house says the move is part of an ongoing strategy to “increase brand
awareness” and “strengthen direct communication” with audiences online and in social
networking sites. It adds it is planning to launch a series of dedicated microsites and apps in
the ‘near future.’
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It also includes a ‘my Versace’ feature that allows users to personalise their shopping
experience.

Culture

Robin Givhan wrote of Versace in the Washington Post, "Designer Gianni Versace is being
mourned by the fashion industry as a fallen titan. Before Versace, there were no
supermodels, no celebrities at shows and in advertising, no screaming fans. Fashion was
not entertainment, it was merely clothes. … Over time, his work was celebrated not only in
fashion annals for its brashness but also in museums because of the ways it reflected the
culture and re-energized the Old World artistry of the … seamstress of the couture. …
Versace understood the importance of marketing. He loved celebrities and knew that they

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 not only attracted the attention of the press, but they also helped to set trends."

“We don’t produce one item outside of Italy. I’m very proud to say that. This is a strategy”

Globalization

Next up is China. “Because it’s a huge market for us,” she states. Akeroyd says that Asia
accounts for 46 per cent of Versace’s overall business: Gianni Versace opened his first store
in China in 1983, well ahead of the influx of western luxury brands. “But if we go to China, I
want to go to the Forbidden City,” Donatella says. “That, or nothing. I know it’s commercial,
but no one has gone there before. Never a fashion show.”

Soheil Abedian, of the Sunland Group, approached Versace in 1997 and successfully
proposed a luxury hotel built upon the Versace brand; the first Palazzo Versace opened on
Australia's Gold Coast on 15 September 2000.[47][48] The hotel was sold to a Chinese
consortium in December 2012.[49][50] The second Palazzo, the Palazzo Versace Dubai,

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was completed in December 2015 and is located on the foreshore of Dubai Creek.[51] A

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third Palazzo is under construction. The Palazzo Versace Macau was announced in 2013

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and will be built in partnership with Macau's largest casino operator SJM Holdings.[52][53]

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[54] The Palazzo Versace hotels are the first fashion-branded hotels in the world and place

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an emphasis on beauty and luxury.
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Versace partnered with the Mind Group firm in China in 2015. The two companies designed
luxury residence towers called the "Versace Residencies." The goal of the creators were to
combine Versace's luxury home elements with elements of traditional Chinese culture.[44]
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This same year, Versace partnered with the ABIL Group in India to develop another
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residential project. These luxury homes are located in South Mumbai.[45]

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In 2015, Donatella Versace was featured in Riccardo Tisci's Givenchy campaign.[46]

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Change
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Multiple changes happened within the organization and management of Versace. Post the
death of Gianni Versace in 1997, Donatella Versace took over management and running of
the company. While the company remained successful and headstrong in its front there were
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problems with communication and that on the storefront side due to inefficient management
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by multiple CEO’s. Despite witnessing multiple CEO’s from 2003 upto 2018, Versace faced
shortcomings in profits and revenues.

Hence in order to make a turnover they accepted an almost irrefutable offer from Michael
Kors which offered double the sales revenue of Versace in 2018 (GBP 2 Billion). 100% of
Versace was sold including the 20% held by Blackstone Group and the 80% held by the
Versace Family. This was done with Michael Kors growth strategy in mind to help create a
turnaround for the business and expand Versaces presence in the market as listed below.
They now have an extremely diverse product portfolio allowing them to have heavy influence
on the market of high and luxury fashion.

“The family couldn’t actually ensure the label's continuity, either on the creative front

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 or the managerial one, unlike Prada and Ferragamo, where a new generation is
beginning to take over,” said professor Testa. Hence the sale to ensure Versace’s
continuity.

After Versace being taken over by Michael Kors there have been a number of changes
happening:

-The company will "build on Versace's luxury runway momentum. 09

- More stores to open
-More focus on shoes and accessories; to increase revenues of this from 35% to 60%.
-Grow Sales revenue to 2 billion USD

Versace Versus and Versace Collection – have already been discontinued under Capri's
ownership. Versace's stores, previously focused on selling clothes, will be reorganised to
feature more handbags, footwear and small leather goods.

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Revamps are also underway in design. New styles will push what the label calls its “brand

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codes,” such as the Medusa logo and gold barocco print Versace is well known for,

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integrating them into different product segments such as the hardware on handbags.

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NEWS & ANALYSIS rs e
Versace Plans to Open Dozens of Stores a Year to Meet $2 Billion Goal
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The fashion holding company plans to double Versace's annual sales by reshuffling its
product strategy.
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Capri Holdings Ltd., which bought the Italian fashion label for about $2.2 billion late last year,
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plans to open dozens of stores annually and renovate existing shops to reach its goal of
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doubling Versace’s annual sales, executives said at an investor day Tuesday. The company
also will spend more on the brand’s marketing as it expands into handbags and accessories.
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“It’s very clear: The productivity in our stores is not what it should be,” said Jonathan
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Akeroyd, Versace’s chief executive officer, who aims to nearly double the boutiques’ sales
per square foot. “We need to rapidly increase the productivity and this will really be the real
driver to reach us to our $2 billion” revenue target.
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Capri, which also owns the Michael Kors and Jimmy Choo brands, wants to expand from its
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existing 188 Versace stores to about 300 by 2022, with new locations across each
geographic region. More than half of Versace’s existing store fleet is in Asia, including 40 in
China.

Stategy

In 2018, Ronnie Fieg and Donatella Versace debuted their Kith x Versace collection, which
featured a modified medusa logo with "KITH" written over its eyes.[42]

Versace Men's Fall 2019 collection featured several items with the logo of Ford Motor

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 Company. According to the fashion house, the two companies joined forces to channel "the
excitement of buying your first car. Excitement and aspiration of owning something as an
extension of one’s personality, something very connected to the idea of being a man.”

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