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.