Versace to Cut 350 Jobs to Restore Profitability
The Versace fashion house on Wednesday announced it will cut 350 jobs worldwide as part of a reorganization aimed at returning the group to profitability in 2011.
Versace said it will streamline production, review store network and reduce capital investments and overhead. The measures will be implemented by the middle of next year.
CEO Gian Giacomo Ferraris said in a statement that the company will lose money in 2009 and the measures were necessary to help stanch future losses.
"No organization can allow a situation like this to continue, especially given the flat outlook for 2010," Ferraris said in a statement.
Versace approved a new three-year plan earlier this year before the departure in June of the previous chief executive, Giancarlo Di Risio, who had joined the privately held, family-run company in 2004 after a euro120 million debt restructuring package was agreed with banks.
Versace said earlier this year that first-quarter revenues were down 13 percent.
The economic slowdown has taken a bite out of the luxury market, which is forecast to contract 8 percent from 2008 to euro153 billion ($228.25 billion) in 2009, according to a study by Bain & Co.