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.
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Versace Chief Executive Giancarlo Di Risio is to leave the celebrity-favorite fashion house and the move could be announced late next week, a source close to the situation said.
Newspapers have recently speculated about Di Risio leaving the company. Daily Il Sole 24 Ore last week said he and design head Donatella Versace were “close to a divorce” because of disagreement over strategy.
“It is all confirmed, the story between him and the company is finished,” the source said, adding that the move could be made late next week after a long holiday weekend in Italy.
“They are agreeing it all.”
Versace said there was no comment to add to a statement it released on Monday, in which its board denied “the existence of friction between the CEO and the Creative Director Donatella Versace regarding the necessary policy of cutting costs.
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Italian fashion house Versace denied news reports there was friction between design head Donatella Versace and Chief Executive Giancarlo Di Risio.
Newspapers have speculated about Di Risio possibly leaving the company. Daily Il Sole 24 Ore last week said he and design head Donatella Versace were “close to a divorce” because of disagreement over strategy.
“With regards to the recent news items and articles that have appeared in the press, the board unanimously and categorically denies the existence of friction between the CEO and the Creative Director Donatella Versace regarding the necessary policy of cutting costs,” the fashion house said in a statement.
Di Risio was hired at Versace in 2004.
Versace’s board also approved first-quarter results, which showed a fall in revenues of 13.4 percent compared with last year “but with a positive net result.”
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