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Jan 28, 2010
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Versace sees rising China, stable US sales

By
Reuters
Published
Jan 28, 2010

MILAN, Jan 28 (Reuters) - Italian fashion house Versace, in the throes of a restructuring effort to return to profit, said sales rose more than 20 percent at its Far East stores this month, and the U.S. market was stabilising.

Versace
Versace spring-summer 2010

Chief Executive Gian Giacomo Ferraris told Reuters the designer house, which is cutting about a quarter of its 1,300 global workforce, was also looking to re-enter Japan next year, as it rebuilds operations there from scratch.

"There is significant growth in the Far East -- in China, Hong Kong, Macau ... There is some sign (of improvement) in Europe," he said in a telephone interview.

"At least in the U.S. we are not seeing a negative number; the situation is stabilising."

Designer-hungry China is seen leading growth in luxury goods sales this year, giving design houses some cause for optimism as they emerge from the financial crisis. [nLDE60H1RH]

Versace, whose gowns are worn by a string of Hollywood stars, confirmed previously given forecasts for a 2009 pretax loss of 30 million euros ($42.12 million), widening from a loss of 400,000 euros in 2008, Ferraris said. Revenues last year fell to 273 million euros from 336.3 million in 2008.

"We are now closing the books so we will still have one month to finalise the details; we confirm these expectations."

SEXY, GLAMOROUS, COLOURFUL

Versace, known for its Medusa logo, is owned by design head Donatella Versace, her daughter Allegra and her brother Santo.

In recent years, under Donatella's direction, it has moved away from its trademark glitz to outfits with a broader appeal. It has just presented a cheaper womenswear line, with bigger sizes.

"It is a more accessible collection, with good balance between price and quality. The feedback has been positive," Ferraris said, adding a complete line of accessories would be launched for the spring/summer collection.

Versace, like other luxury goods makers, wants to increase accessories sales as part of its turnover to 40 percent in 2010 from 35 percent last year, and it is looking at possibly launching an underwear and beachwear line.

Designers have become increasingly aware that jewellery, hats and shoes give shoppers who can't afford the elite frocks a way of buying into their favourite brand.

Ferraris said Versace would open four new stores this year

-- in Melbourne, Beijing, Mumbai and Las Vegas -- and would -- in Melbourne, Beijing, Mumbai and Las Vegas -- and would re-enter Japan in 2011.

As part of the restructuring to return to profitability in 2011, Ferraris said Versace has reached a preliminary agreement with unions in Italy regarding "cassa integrazione" -- a scheme that allows Italians in large industrial firms to be sent home temporarily on reduced pay.

About 150-160 people will be affected, he said.

The group is closing its accessories-making Burago plant in northern Italy, but Ferraris said workers would be transferred.

"We are taking the people who have the know-how ... and moving them to (another) plant. We will not lose this know-how."

(Editing by Will Waterman)

($1=.7122 Euro)

((Milan newsroom +39 02 6612 9507, fax +39 02 801 149, [email protected])) Keywords: VERSACE/

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