Versace's luxury hotels to woo wealthy

Published: 8:13AM Thursday November 16, 2006 Source: Reuters

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Italian fashion house Versace plans to build 15 luxury resorts around the world in its latest effort to woo the super-rich, the company said on Wednesday.
   
Versace chief executive Giancarlo Di Risio has overseen a comeback from a loss-making group with a messy mix of labels to a sleeker, profitable luxury brand with a focus on exclusive products for the very wealthy.
   
"The hotels close the circle of super-luxury: clothing, yachts, private jets, and now resorts," Di Risio said.
   
Under an agreement with Australian property developer Sunland Group Versace will design and furnish the 7-star hotels, which will all be modelled along its historic headquarters in Milan.
   
Demand for luxury goods is booming as the market for designer clothes and accessories has embraced young professionals who will splash out on branded handbags and glamorous shoes as status symbols.
   
Most fashion houses have responded to that trend by selling a broad range of just about affordable accessories.
   
Versace has also expanded its accessories business, but is banking on a growing number of extremely rich customers who are willing to spend more money to buy something special.
   
"Accessible luxury is not our thing. Our smallest handbag costs 1,200 euros, and our focus is on bags that cost 2,000-2,600 euros," Di Risio said.
   
Di Risio declined to say how much Versace stands to gain from the hotel deal. But the first in the series will open in Dubai in 2009, offering guests a swimming pool with live exotic fish and specially cooled sand. Versace already owns a hotel on Australia's Gold Coast.
   
Versace made its name as a label of choice for publicity hungry celebrities, mad for the revealing dresses in shock colours that were a hallmark of designer-founder Gianni Versace.
   
But after Versace was murdered in the 1990s and his sister Donatella took over, the company floundered and came close to bankruptcy.
   
Di Risio enforced a turnaround plan that included more wearable, less outrageous fashion collections, the sale of non-core assets and a general facelift for the brand with advertising campaigns that featured Madonna and Demi Moore.
   
He has also pursued the super luxury market for refurbishing yachts and private jets.
   
It costs about eight to 10 million euros to have a plane customised by Versace, and it has furnished two jets and three yachts since launching the service this year. The price varies depending on the kind of interior the client wants.
   
"Go to (Milan's) Linate airport and see how many private jets there are, go to Portofino or Capri and see how many yachts there are," Di Risio said. "There is a large group of very wealthy people scattered around the world."

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