When Versace announced they wanted to sell a 20% stake in the company that valued at $1.5 billion, many contenders threw their hat in the ring for the chance. Bidders included such heavy hitters as Italian owned firm Fondo Strategico Italiano (FSI) as well as Bahrainian Investcorp and two New York owned equity firms Blackstone and CCMP Capital. Since Versace wanted to retain control of their holding, only private equity firms putting up capital without strings attached were considered. The goal was for Versace to close this funding round by first quarter of this year—and they are right on target.
Versace and Blackstone
GIVI Holding SPA and Gianni Versace SPA, doing business as Versace, announced they reached an agreement with Blackstone. The deal struck gives Versace a 150 million euro infusion of Blackstone’s cash in exchange for 60 million euros in stock, which does equal Versace’s original offer of a 20% stake. However, Blackstone does get to place one of its own on Versace’s Company Board.
Although this is the first time in the family-owned company’s history they’ve brought in other partners, the Versace family will retain control with Ms. Allegra Versace Beck, Group Creative Director Ms. Donatella Versace and Mr. Santo Versace guiding the direction.
“I am very pleased to work with Blackstone and, in particular, with Stephen Schwarzman, whom I admire for his achievements and who shares the family’s vision for the development of Versace,” said Donatella Versace in support of the alliance. “We have gained a strong and unique positioning in luxury fashion, and I believe that this investment in the Company, together with our clear direction and our outstanding management team, will enable us to achieve Versace’s potential.”
Versace of the Future
With the significant capital raise, Versace intends to expand the company’s retail network around the world in both emerging and existing markets. The money will also be used to further develop its portfolio of other brands, such as Versus, and its accessories lines and e-commerce platform.
Blackstone is also pleased with adding Versace to its portfolio. “It is a great pleasure to be working with a true icon in Donatella Versace. She has a unique position in the fashion world and has helped make Versace one of the few global, luxury fashion brands,” said Stephen A. Schwarzman, Chairman, CEO and Co-founder of Blackstone. “We are delighted to be involved with this exceptional business, and are committed to helping Versace realize its strong growth potential around the world. We look forward to helping Donatella and the management achieve their goals.”
Blackstone has already made a winning investment for when Versace releases its 2013 results at the end of March, it’s expected to announce revenues up approximately 18% to €480 million and EBITDA up more than 50 per cent to at least €69 million.
About Versace Timepieces
Versace has long been known as a leader in the world of glamour and fashion. The evolution of the Versace style has demonstrated a perfect balance between the classical and modern. In every Versace Watch creation is a commitment to the finest quality and a reflection of a long manufacturing tradition. This is demonstrated by the Greek key and Medusa logo, unmistakable design details that confer a distinctive signature and represent a definitive expression of the glamorous style of the Maison. The Italian style of the watches combined with the “Swiss Made” precision and innovation are parts of what makes the watches what they are.
Today the Versace brand is widely recognized as a leader in the world of luxury and renowned for its classic elegance. Timepiece collections range from $795 to $22,000 retail.