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The latest one to swirl around the fashion world late last week is that IT Holding’s chief Tonino Perna has approached Santo and Donatella Versace about forming a joint venture between his fashion and manufacturing group and the famous, but financially struggling, house.
This follows such wild rumors as the one that Tom Ford and Domenico De Sole wouldn’t renew their contracts at Gucci Group in order to take over control of Versace (which was denied) to reports that Luxottica chairman Leonardo Del Vecchio has invested up to $40 million in Versace and would eventually seek to buy the company (which Luxottica also denied this summer, although Del Vecchio has joined the Versace board).
A Versace spokesman Friday denied the latest, IT Holding, rumor, which was first published in a local business weekly. “The company is not for sale, nor is it involved in any merger and acquisitions discussion with IT Holding or any other organization,” he said.
Similarly, IT Holding sent out a terse release Friday denying any negotiations with Versace: “For the second week in a row, IT Holding is forced to deny what is contained in an article published by a financial weekly regarding meetings with the Versace Group to merge the two groups. The hypothesis was not only never presented to the Versaces, but never even considered by IT Holding.”
But the clock is ticking for Versace in more ways than one, related to the fashion house’s complicated shareholding structure and some of its debt.
Versace has been struggling over the last 18 months, as have many fashion and luxury goods houses. As reported, Versace posted a net loss of $6.8 million in the year ended Dec. 31, 2002, compared with a profit of $8.5 million in 2001. The trying market conditions, complicated by the war in Iraq and SARS, caused sales to dip 5.4 percent to $564.6 million from $596.8 million. In local currency terms, net losses totaled 5.8 million euros, compared with profits the year before of 7.3 million euros. Sales fell to 482.8 million euros from 510.3 million euros.