Luxury Management – Versace

The Situation.

To put into practice our strategic thinking, let’s consider a complex strategic situation.

Capri Holding, owner of Brands like Michael Kors or Jimmy Choo, acquired last 2018 Versace. The plan is to create the so-called “American LVMH”. This initial plan however is not providing, so far, the expected results.

As a consequence, analysts and media experts are questioning the strategy. Nevertheless, it is still soon and the strategy might be still valuable, but require some more time.

In line of this controversy, John Idol (Capri Holding’s CEO) is interested in getting to know your perspective and sound strategic view on Versace’s potential.

Here you have some background information:

Versace’s background and strategy under Capri’s management:

https://www.businessoffashion.com/articles/professional/versaces-new-owner-plans-to-build-americas-answer-to-lvmh-it-has-a-long-way-to-go

https://www.bloomberg.com/news/articles/2019-06-04/versace-to-open-dozens-of-stores-a-year-to-meet-2-billion-goal

Carpri’s Strategy and intentions:

https://www.businessoffashion.com/articles/professional/the-plan-to-turn-versace-and-michael-kors-into-americas-lvmh-begins-now

Analyst and Media skepticism about current evolution:

https://www.voguebusiness.com/companies/capri-holdings-versace-jimmy-choo-michael-kors

Latest Capri’s results – 2^nd quarter.

http://www.capriholdings.com/news-releases/news-releases-details/2019/Capri-Holdings-Limited-Announces-Second-Quarter-Fiscal-2020-Results/default.aspx

The report:

2 pages report (maximum). In case you want to add any framework summary, figure, table or image, please do so as exhibits, the one-page limit should be exclusively for text analysis.

Content:

Please answer in your report answer the following questions:

Q1 – What has been traditionally (in the past) Versace’s competitive advantage?

Here make sure to introduce in your answers the reasons why Versace is a luxury firms. Likewise your answer show also show a good understanding as well of the firm and it’s particular marketing mix.

Q2 – Which are the main characteristics of the strategy that Capri has planned for Versace?

Here you must identify the main strategic choices that Capri has planned for Versace.

Q3 – Given the strategic direction that Capri is providing to Versace, which potential do you see for Versace looking forward?

Q4 – Which limitations, risks, or even mistakes, do you in the strategy that Capri has designed for Versace?

Suggestions: 

• In the report you should evaluate the current strategy of Versace. Here the CEO might expect your view on its potential, but also its limitations to compete successfully in the market.
• The articles are not a case study and they are not meant to provide all needed information. The student is expected to complement the report his/her own research to understand better the situation and Versace as a firm.
• While you might include the role of corporate strategy (Capri Holding as owner), consider that your main goal is to review Versace’s potential as a company/brand. Do not discuss in depth the the role of Capri as owner and pay attention to Versace’s competitive (market) challenges.
• Remember that I am not asking for your opinion. This is simply an excuse to show me and put into practice the lessons you have gained in the course.
• As in any strategic situation, this is not a quest for the right/wrong thing to do. You should identify the main managerial issues, its complexity and how the lessons gained in the course help you unveil such complexity.