versace

More accurately, trouble has been brewing for quite some time now.

We make light of Versace‘s relatively piddling bag efforts on a regular basis (or whenever I can’t think of something more interesting to write about), but based on Dana Thomas’s very interesting article on the company’s troubles for the latest Newsweek, bad bags aren’t the only problems that Donatella & Co. are having.

Whether or not we want to hear it, handbags are one of the most profitable and important sectors of a worldwide luxury business – the only thing that makes more money for companies like Chanel and Dior is beauty. So is it true that as go purses, so goes the company?

That idea isn’t directly addressed in Thomas’s article, but it’s one that’s worth discussion. In her own book, Deluxe: How Luxury Lost Its Luster, Thomas explains in (sometimes painful, for purse lovers) detail the way that profits from cosmetics, fragrance and handbags have made high end brand conglomerates like LVMH and Gucci Group such cash cows.

And in these stark economic times, companies like Hermes and Louis Vuitton that are overwhelmingly known for their handbags are the ones producing healthy numbers. Since neither of those companies benefits directly from massive cosmetic sales, it stands to reason that their ability to sell handbags hand over fist has had a huge impact on their financial solvency during the luxury collapse. Versace’s handbags (and their prices) have become a running joke around here, and we’re the exact people to which they should be trying to appeal – a niche audience of people that already spend gobs of money on bags. If you can’t sell a bag to us, who can you sell it to?

Surely Donatella’s coke-fiending and jet-setting haven’t helped the company be taken seriously as one that values design and quality, but if they could, at the very least, get their handbag division under control, then maybe the money would start rolling in in a meaningful way. And what of Versace’s shoe line? Shoes are steadily catching up with bags as one of the “it” items that savvy fashionistas must have, but when was the last time you saw, let alone coveted, a Versace shoe? They do make shoes, right? I’m having a hard time conjuring a mental picture of one. And if they don’t, why not? It’s another big margin product that sells well, even in this economy.

Thomas comes to the conclusion that it may be time for the family to exit the family business in order for the company to survive, and if they’re the ones responsible for the complete mishandling of the most profitable section of their company, then I can’t say that I disagree with her. Whatever happens, let’s hope that someone realizes that good bag design could help Versace stay afloat.

Picture via NYMag.com.

  • Jeannie

    I wholeheartedly agree! I honestly can’t picture a Versace shoe! LOL I think that the family should leave Versace and let them get back on their feet. Interesting article!

  • Michael St. James
  • ujie

    but nobody can sell a bag to you! you’re always talking about how you’re broke, or something

    • http://www.purseblog.com/ Amanda Mull

      Shannon, is that you?!?! Those conversations were private!!!!1!

      • http://www.purseblog.com/ Megs Mahoney Dusil

        HAHA. Poor Amanda!

  • http://www.purseblog.com/ Megs Mahoney Dusil

    Amanda, this is a really good article. I really wish Versace would step up their handbag game. It is such a well known company and truly has such a recognized name, but their handbags need attention.

  • Linda

    The Versace line has always reminded me of a very expensive version of Juicy Couture…over the top and tacky.

  • Mara

    ITA Linda, so true!

    I agree though, they need work. it’s a shame that Versace’s bags don’t have the same name recognition as, say, Louis Vuitton.

    Check out my post on fake handbags: http://bellesandbulls.com/bbblog/2009/11/10/is-it-right-to-pretend/

  • hect

    well lets say that i cosidder versace to be aperiod brand just like halston and cardin had their time versace moschino have had theirs i allways think of the period brands that is the ones that make it big in one point of history but i think that in the end the elders walk in and stay versace has put up a good fight in time but even the big ones like gucci and dior fall so versace is to me hanging on a thread they have pulled all the tricks the supermodel making the supper high heels like the YSL super high heels but no true originals no true versace but want to now why theese products just donfeel like versace well because versace is a period brand to me it dyed ith gianni and i think that there only salvation is to rebbot and go for the jet set clients in classic clean boutiques and to refocus on style caapability from couture like valentino did the valentino rose on the dreses are now on handbags and they look great because they arrre soo verrryy valllenntinnoooo comprnde cara mia!!! O AND DONATELLA SOULD THINK ABOUT STEPING DOWN SOON

  • Larissa

    Lately, it has become more and more apparent that Versace lacks originality in handbags and leather goods. They’re shapes and silhouettes are not TO DIE FOR by any means and I agree with what Linda said above.

    • gianni grosso

      hey who are you people to critisize versace or any of these other fashion houses you are not fashion designers and you don'[t have the money to afford these bags. your just jelous because you have average jobs and don’t have closests full of these bags like some people do. my family are those people. we have the money to afford these bags which the ladies in our family like very much and iam going to be a fashion designer. when i graduate design college my uncle is going to buy me stores in new york so i can sell my clothes. i am inspired by these bags that you jelouse people make fun of.

  • MizzJ

    It’s always so sad to hear about another house falling. Will there only be Hermes, LV and Chanel in the end? That will be a sad day indeed. I love Versace for their exuberance and boldness, and that is what they are known for. It’s hard to imagine that translating into handbags, as well as Chanel timelessness has. I very much hope they pull through. They are a house with so much history and past creativity that is so needed in this industry. Without Versace, fashion will be that much less interesting.
    http://highmaintenancewoman.blogspot.com

  • karolynka

    versace should forget about bags and shoes – i love their clothes, they are so sexy and feminine and their frangrances are very good to..i love versace, don’t even dare to compare versace to juicy couture! omg!

  • karolynka

    and louis vuitton – come on isn’t that tacky? their bags aren’t even leather and EVERYBODY out there has one or a fake one! only some LV goods are worth spending $$ on them, most of their proceeds come from being so popular and quite affordable because almost every fashionista started her bag collection with a speedy..

  • ping

    I agree with some of the items said b/c I have some gorgeous OLD versace bags that always get so many compliments but no one realizes that they are versace. Versace has gone a little overboard the last few years with the the fugly fur bags (in blue and pink, eeww) and also the “snap” bags have become a little boring. Their shoes used to be HOT HOT HOT but the last few years they changed manufacturers or something b/c their high heels are no longer comfortable!
    That said, i have some gorgeous old and new coats from them that are just out of this world and the best thing about Versace is that unlike LV, not everyone has them. But I do agree with Amanda that their bags are way overpriced for the style and quality. I do hope Donatella comes to her senses and start designing some gorgeous stuff she did in the late 90’s and early 2000’s….ping

  • birkel

    so agree with karolinka the vuitton issue true but versace !!!! truly……… just losing it to my taste

  • Bag Brag

    I think they are on the right track with Versus accessories with the Kane family. If all goes well from there, Donatella should put the Kanes in charge of Versace accessories!

    http://www.bagbrag.blogspot.com

  • MAX

    I think they should more work on clothes because (in my opinion) their clothes the most interesting. Other things especially bags are just tragic designs. I think people who know fashion even you guys can design something way better than those scary hairy bags that i saw at the Versace store. The prices too are ridiculous why it’s simple enough to think about spending money on something that look at least average like 3400$ Versace bag I think i will buy LV like 2-3 LV bags that look way way way better than Versace bags. LOve their clothes though.

    • http://www.purseblog.com/ Amanda Mull

      The problem for a company that size is that clothes don’t bring in enough cash on their own. They need either accessories or beauty/fragrance to have the kind of sales rates and margin percentages that allow them to throw the lavish shows and parties and fly Donatella all over the world on private jets. Their overhead is so high that profits from clothes alone can’t possibly sustain the company. There’s a much wider customer base for designer handbags than designer dresses, and that’s how most large fashion houses make the money that allows them to continue to produce clothes on the scale that they want to.

  • Anonymous

    I agree that Versace should drop making bags and continue with the clothing. Everythiing else does remind me of a high end juicy couture. Even their shoes are too much…for the well paid Hooker

  • dierregi

    I think the Versace era is over. Nowadays we have Dolce and Gabbana doing the same type of clothes (boldish and garish), but a tad less slutty and more fun. I am actually surprised Versace did not go bankrupt but still manages to keep some shops open. During the sales in Italy you have people standing in long lines waiting to enter inside the Prada and D&G shops, but Versace… no crowds there…And the genius of the family was Gianni. That Donatella woman was supposed to the “muse” (whatever inspires you :-) but that has nothing to do with her actual ability to create (and manage) covetable fashion items.

  • miss Wang

    Versace is Tacky period The only good luxury brands are Louis Vuitton,Gucci and Hermes.

  • Adrienne zedella

    lower your prices, you’ll sell more to more people. end of problem. fb