Italian Fashion House Versace to Cut Jobs Expects 2009 Loss
Italian fashion house Versace is cutting about a quarter of its global workforce and expects to post a loss this year as it takes a hit from slumping demand for luxury goods and designer items in the financial crisis.
The celebrity-favorite fashion brand, whose gowns are worn byHollywood actresses such as Angelina Jolie, is taking measures aimed at returning the group to profitability in 2011, it said in an emailed statement.
A source close to the company said Versace had a pretax loss of 400,000 euros ($593,400) last year and this would widen to 30 million this year.
Versace, which has a total workforce of 1,360, said it would cut about 350 jobs worldwide in a reorganization plan which will see it rationalize production facilities, review its store network, reduce capital investment next year and cut overheads.
All measures will be implemented by the middle of next year.
“Trading conditions in the wake of the global financial crisis have been severe and the company expects to make a loss in 2009,” Chief Executive Gian Giacomo Ferraris said in the statement.
