Daily Front Row

2009 May 26

Versace CEO Expected to Step Down

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(NEW YORK) The economy’s continued assault on luxury brands has been relentless, and Versace is the latest house to rethink its strategy following a 13.4% drop in first-quarter revenues. While rumors of a corporate shake-up have persisted for months, the Wall Street Journal reports today that Versace’s chief executive Giancarlo Di Risio is expected to step down “over the next few days.”

This news comes immediately following an oblique press release sent out last night by Versace that referenced a meeting earlier in the day by the board of directors, which consists of Leonardo del Vecchio, Paolo A. Colombo, Massimo Cremona, Marco Salomoni, Di Risio, Santo Versace and Donatella Versace. Donatella Versace, the brand’s creative director, holds a 20% stake in the firm. She is backed by her daughter Allegra Versace Beck, who inherited a 50% stake in the house after her uncle Gianni Versace's death in 1997. Santo Versace owns the remaining 30%.

“With regards to the recent news items and articles that have appeared in the press, the Board unanimously and categorically denies the existence of friction between the CEO and the Creative Director Donatella Versace regarding the necessary policy of cutting costs,” read the statement.

The Board also approved a restructuring plan conceived by consulting firm Bain & Co. that aims “to establish what measures should be taken over the course of the next 3 years.” According to the Journal, Bain & Co. was hired two months ago after Versace and Di Rosio clashed when the CEO asked Versace to simplify her designs.
ASHLEY BAKER