Yesterday Versace reached an agreement with unions in Italy to move forward with cutting 350 jobs, or about 26 percent of its workforce, by June. The cuts are part of CEO Gian Giacomo Ferraris's plan to stop bleeding money. He expects operating losses for 2009 to total $42 million, while he estimates sales fell about 19 percent. Ferraris also plans to close down Versace's three-year-old accessories factory in Milan (though about 37 of those employees will be relocated to Versace's separate ready-to-wear plant). Accessories being the bread and butter of luxury labels, Ferraris said the cuts won't mean a reduction in accessories production, and expects accessories to generate 40 percent of revenue this year, up 5 percent from last year.
Ferraris reiterates in Bloomberg the sentiments of many buyers so far this year, which is that 2010 probably won't be much better than 2009. Not until 2011 does he expect to "break even on the bottom line."
Under Ferraris, Versace also launched a lower-priced line for fall called Versace Collection, which is 30 to 40 percent cheaper than the main line. Meanwhile, the label continues to operate other lines, including Atelier, consisting of custom dresses retailing for upwards of $22,000; the signature collection, which includes menswear and womenswear starting at around $1,100; and Versus, designed by Christopher Kane, which starts at around $280.
Aside from clothing, Versace is, putting its name on just about everything one could use for living large. They're opening a hotel-residence in Dubai, naturally, which should be completed by the end of the year. Ferraris said the label was also looking into another opportunity in this vein, but wouldn't say where. Branding hotels and yachts and palaces were the same strategy the sheikh who almost bought Christian Lacroix planned to use to turn that label around. Versace also recently launched a cell phone, which will cost more than Dior's $5,000 cell phone. They also may relaunch beachwear and underwear in 2011.
Sounds like they've got all their bases covered: clothing lines, living quarters, electronics. All they're missing is toilet paper! And maybe they should license the T-shirt pictured here, the latest by artist Christopher Sauvé (buy yours here beginning March 1). They've already admitted Versace needs saving. They may as well make a buck off it.
Most Viewed Stories
I Worked at Fyre Festival. It Was Always Going to Be a Disaster.
Famous Guests Were Reportedly Warned Not to Go to Fyre Festival in Advance
Life Lessons From the Great Fyre Festival Disaster
The Kardashians Just Broke Up With the Stylist They’ve Been Using for a Decade
Don’t Follow Pippa Middleton’s ‘Extremely Restrictive’ Wedding Diet
These Tweets Will Make You Very Glad That You Didn’t Spend Thousands of Dollars to Get Stranded in the Bahamas
Female Dragonflies Fake Their Own Deaths to Avoid Males
Why Everyone Loves the Alpha Girl
Why Wallflowers Don’t Make Friends
11 Pairs of Unflattering Pants That Will Make You Look Ugly-Cool
The Cut’s Latest Fashion FeaturesCiara's Wedding Dress Was Too Big for the Chapel
To be fair, it was a 13 foot-long dress.You and Rihanna Will Both Want to Invest in Dior’s New Bag
It's got something for everyone.Polo Shirts Have Turned Their Back on Ryan Lochte
Along with his other major sponsors.Ryan Lochte Will No Longer Be Paid to Wear Tiny Bathing Suits
Speedo remains committed to transparency.Laura Brown Is the New Editor-in-Chief of InStyle
After 11 years at Harper’s Bazaar.Tyra Banks Is Going to Teach a Class on Smizing at Stanford
"If I see somebody not paying attention, I’m gonna call on them."This Floating Pier Is the Most Zen Installation Ever
Walking on water in Italy.Nation Is Appalled by Matt Lauer’s Nude Ankles During Ryan Lochte Interview
What’s the opposite of “Jeah”?8 People at the Life of Pablo Pop-up Explain Why Kanye West Is a God
"I mean, Kanye West is just Kanye West. There's not more or less you can say about Kanye West. He's just Mr. West!"A T-shirt Is Enough
Simplicity, versatility, and cool. What more could you want?
She took a perfect pencil dive off a 30-foot yacht.American Apparel Is Being Sued by Former Workers
As the company considers putting itself up for sale.A Gendered History of the Tailored Suit
From Marlon Brando to Coco Chanel.How Zendaya Developed Such Great Style at the Young Age of 19
The star's best looks from Disney to now.Proof That If You’re Chic Enough, a Little Federal Investigation Doesn’t Matter
Is this the best they could do?5,300-Year-Old Mummified Iceman Probably Would’ve Been a Street-Style Star
He had several different looks and was “pretty picky.”J.Crew Has Identified 226 Shades of Pink
Even more than there are shades of gray.Gigi and Bella Hadid Merch Is Now Somehow a Thing That Is Happening
Today in Hadidiana.Gird Your Loins for the Return of Yeezy to New York Fashion Week
The season approaches.This Indie Brand Had a Great Response to Ivanka Trump
When she bought one of their cuffs, they donated the proceeds to the Clinton campaign.