Per reporter: Ding Zhouyang Du Wei Per reporter: Zhang Haini
Image source: The company's official Weibo
The rice dumplings of the Dragon Boat Festival have not yet been eaten, and the mooncakes of the Mid-Autumn Festival are on the road. Traditional Chinese festivals have long been an important marketing time node for overseas brands, and they are scrambling to lay out in advance and launch limited editions for the upcoming Tanabata Festival, which has become a prescribed action for major luxury brands.
This year's Tanabata Festival is so hard that Versace should have a name. It not only launched the sale of Tanabata limited models, seized the consumption power of romantic economy, and also entered The flagship store on Douyin on July 26. Previously, the brand has opened flagship stores on Tmall and Jingdong, and when high-end luxuries such as Chanel and LV are still maintaining a high-cold posture and maintaining a distance from e-commerce, Versace, which is also a high-luxury, has actively embraced three mainstream Chinese e-commerce companies.
Founded in Italy, "genius designer" Giovanni Jenni Versace ("Gianni Versace") combined luxurious and dazzling design with pop art, rock music and other popular elements, and he founded the eponymous brand Versace in the 1990s, and its fans included Princess Diana of the United Kingdom.
But Versace's business myth failed to continue as usual, and after the founder's death in 1997, Versace lost money and closed stores for many years, and finally in 2018, it was handed over to the American light luxury group Michael Kors (also known as "MK"). After the completion of the acquisition in January 2019, MK Group as a whole changed its name to Capri (CPRI, share price of $48.34 and market capitalization of $6.903 billion).
Now that the acquisition has been completed for more than three years, is Versace returning to its former glory? Can Capri overtake in curves after "Snake Swallowing Elephant"?
Tanabata and e-commerce grasp both hands
With Qixi (August 4) approaching, China's most romantic traditional festival is becoming a new battlefield for luxury brands. The "2021 Luxury User White Paper" shows that young consumers pay more attention to the sense of ritual of life, and festivals are an important scene for them to buy luxury goods. 27.4% of the luxury consumers surveyed spend on Tanabata.
Image source: 2021 Luxury User White Paper
Versace had set its sights on the festival early on and unfolded its precise layout. On July 19, the first round of "warm-up" was carried out, and the product slogan of "Meet a Better Self in Romantic Tanabata" was played on the official website Weibo. The "Daily Economic News" reporter noted that versace's Tanabata limited model launched this time is a peach blossom pink "labyrinth goddess bag".
For luxury brands, with the help of holiday popularity, localization marketing seems to have become a "prescribed action". Judging from the "Tanabata Limited" products in previous years, almost all luxury brands have launched products with exquisite packaging and suitable for gift-giving, among which the design around LOVE, red love and other patterns has become the most beloved symbol of luxury goods. It is worth mentioning that in recent years, the "Tanabata limited edition" of luxury goods has not only marketed products, but also expanded a richer "additional" marketing.
For example, Versace has specially added advance purchase to the "Maze Goddess Pack" of the "Limited Edition" to get the "Tanabata Custom Flower Box" bonus. The gifts are not large, but they show the meticulous care spent to stimulate Chinese consumers to buy.
Versace has also further deepened its layout on China's short video platform – on July 26, Versace Douyin's official flagship store was grandly opened. As of 19:00 on the same day, it has attracted the attention of nearly 70,000 fans. In the early years, it opened stores in Jingdong and Tmall. The official opening of Douyin means that Versace has gathered three major e-commerce platforms in China.
In order to cater to the Chinese market, Versace spares no effort to push the "Tanabata Limited Edition", hoping to be deeply involved in local content operations and establish a lasting emotional connection with consumers, while actively cooperating with Douyin, which integrates the attributes of social e-commerce, which shows the importance attached to the Chinese market and the determination to expand the business in the Chinese market.
Image source: Versace's official Weibo
The fashion empire is trapped in its former glory
Fashion, glitz, business and character ups and downs, Versace is one of the most lamentable.
In ancient Greek mythology, the serpent-haired banshee Medusa had a breathtaking beauty, and whoever wanted to look at her turned into stone in an instant. Versace, which uses Medusa's avatar as the brand logo, has a design concept like Medusa, but if you have seen it, it is difficult to forget. In 1978, the brand was founded by Italian designer Gianni Versace and his siblings.
Starting at her mother's tailor shop in the town, Gianni Versace showed a talent for tailoring clothes at the age of nine. In college, although he studied architecture, he still had a hard time giving up his love for clothing and eventually devoted himself to fashion. Versace's fashion style has been controversial since its inception, and he did not conform to the mainstream of the elegant and appropriate fashion industry at that time, but was bold and avant-garde.
Gianni Versace excels at design and is well versed in marketing. Before Versace, there was no concept of "supermodel", it was Versace who set up a modeling company to let them shine on the catwalk, and Versace's brand clothing also went to the world through the supermodel catwalk. He also invited Madonna to be a model, toured costumes with Michael Jackson, helped Diana tailor costumes to help her get rid of stereotypical royal styles... Nowadays, the "celebrity effect" used in luxury goods is all left over from Versace's play.
The row starts from left: supermodel Naomi Campbell, Gianni Versace, donatella Versace. Image source: Versace's official Weibo
In 1997, Gianni Versace, who was in full swing, died unexpectedly after being shot. Legendary designers have fallen, and the commercial crisis of the brand is also quietly approaching. His older brother, who was the backbone of the family business, died, and his sister Donatella Versace was appointed as the head of the brand.
However, it is difficult to fight the country and defend the country, even if Versace has countless highlight moments in the fashion circle, it is not easy to keep the status of the jianghu.
After Donatella Versace became the head, he established his own design team, but the level of ups and downs, coupled with lack of experience, the Versace brand fell into continuous losses. In 2006, the company was on the verge of bankruptcy, and was far behind by its contemporaries Valentino and Prada. Then Donatella Versace resolutely reversed the situation, allowing Versace to return to the high-luxury echelon, but the follow-up operation was weak, and eventually the Italian family business fell into the fate of being acquired by the American fashion group. In 2018, MK Group invested more than $2 billion to acquire Versace, and the Versace brand no longer belongs to the Versace family.
"A difficult road against the current"
When MK announced the acquisition of Versace, the fashion industry was shocked. Although Givenchy, Fendi, Dior and other luxury goods named after the founders have all been acquired by LVMH Group, compared with lvmh, the old luxury giant LVMH, MK Group is after all a young force that has made its fortune in light luxury brands. Therefore, this acquisition is also regarded by the industry as a "snake swallowing elephant", "light luxury wins luxury".
Despite the ups and downs of performance, with the help of capital, MK Group's expansion ambitions have already emerged. In 2017, it acquired high-end footwear brand Jimmy Choo, officially transforming into a comprehensive luxury group. After the acquisition of Versace in 2019, MK Group changed its name to Capri, and the group owns three brands: MK, Jimmy Choo and Versace.
Image source: Capri's official website
Also on the same starting line as Capri is Coach's parent company Tapestry Group, the emergence of Tapestry and Capri Group, which means that the American luxury fashion power represented by the two intends to become the next LVMH group through mergers and acquisitions.
And after Capri, with the light luxury gene, swallows the high luxury Versace, will it have indigestion? Can Capri's vision of capital markets at the time of the acquisition be realized? The answer: it didn't go well, but Versace was still capri's best card.
Versace's marketing "famous scene" in recent years, Lady Gaga wore Versace costumes to attend the launch of the movie "Gucci Family". Image source: Versace's official Weibo
"I have to pay tribute to the Versace team for taking off their hats." At Capri Group's February 2022 earnings briefing, analysts at Morgan Stanley asked about a review of Versace's performance since it was acquired three years ago, Capri Group Chairman and CEO John Idol said. "Versace previously had several sub-brands, and after the acquisition, we streamlined our business lines, cutting our expenses by $150 million to focus on the main brand Versace. Then we were hit by COVID-19. ”
"Over the past ten to fifteen years, Versace stores have been rarely upgraded and maintained, and we have renovated half of our stores to achieve this balance in the next two years; We can increase store revenue by 4 times, but still can't reach the income level of the world's biggest competitors; We still have to catch up with digital consumption..." John Idol said at the above-mentioned performance exchange meeting, "We are taking a difficult road up the mountain, even against the current." But we never wavered, and Versace's goal of achieving $2 billion in annual sales remained unchanged. ”
In fiscal 2022, Versace's sales rose from $718 million to $1.088 billion, moving into a billion-dollar club. In the medium to long term, Capri expects Versace to contribute 25% to the Group's revenue. At capri Group's investor exchange meeting on July 20, John Idol said the group was willing to continue to acquire luxury brands at high prices. "In the next two to five years, there will be three companies to choose from, mainly European luxury brands."
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