Versace restructuring approved
The board of Gianni Versace SpA on Monday said it had approved a restructuring plan drawn up by an outside consulting firm for the Italian fashion house.
The move effectively sidelines Versace’s chief executive, Giancarlo Di Risio, who is expected to step down over the next few days. Mr. Di Risio wasn’t involved in drawing up the plan by the consulting firm Bain & Co., according to a person familiar with the matter.
The board, which includes designer Donatella Versace and her brother Santo Versace, said the plan aimed to help the fashion house navigate the global economic crisis that has sapped luxury sales world-wide. The statement didn’t provide any detail on the nature of the restructuring plan.
Mr. Di Risio, who attended the board meeting on Monday, is expected to leave the company in the coming days after clashing with Ms. Versace over company strategy, according to people familiar with the matter. Last week The Wall Street Journal reported that Mr. Di Risio was expected to step down.
Versace tapped Bain & Co. to craft a new strategy for the fashion house two months ago as tensions between the designer and Mr. Di Risio rose, the people said. Amid falling profits, Mr. Di Risio has pushed Ms. Versace to simplify her designs, so that the house could introduce new accessories and clothes with lower prices, according to one person familiar with the matter. The two have also disagreed over how to cut costs at the fashion house, the person said.
In its statement Monday, however, the board denied that there has been recent “friction” between Mr. Di Risio and Ms. Versace. The statement didn’t address whether Mr. Di Risio would remain at the company.
Ms. Versace designer holds a 20% stake in the firm and is backed by her daughter Allegra Versace Beck, who owns 50% of the fashion house. Santo Versace holds a 30% stake in the label.
STACY MEICHTRY – The Wall Street Journal