Versace's new CEO, Gian Giacomo Ferraris, who came aboard in July after weeks of purported drama surrounding his predecessor, is taking drastic measures to help the label stop bleeding money. The Versace board approved Ferraris's restructuring plans, so Donatella Versace must like his ideas a lot more than those of the company's last CEO, Giancarlo Di Risio. They reportedly fought over launching a lower-priced line designed by another designer, and paying Mario Testino $140,000 to shoot ad campaigns. (Versace did eventually launch the lower-priced Versus line, designed by Christopher Kane.) Ferraris's plans include cutting 350 positions at the house, or a total of 26 percent of the label's workforce. The Financial Times calls the cuts "the most dramatic by any leading designer during the current downturn." Other major fashion houses could follow suit.
Ferraris says Versace will lose $44 million this year, and only expects to break even for 2010. With the cuts, Ferraris expects to enjoy a profitable year in 2011. The CEO adds that he could not afford to wait for the economy to improve. While most of the job cuts will probably be in Italy, the label has already announced plans to close its stores in Japan. In the near future, Ferraris could close other loss-making stores among Versace's 85 left standing. The label will look at other ways to save money, such as lowering overhead. Yet there is still no talk of lowering prices of Versace's main line. Like the see-through skirt from the spring collection, pictured here. How much is that going to cost? An arm and a leg? And arm and two legs? Oscar de la Renta and Chloé are among the dozens of labels that have already cut prices. No word yet on how spendy the spring 2010 Versace campaign will be.