Versace, the Italian fashion house, has decided to cut jobs in the wake of low demand for designer merchandise. The layoffs will affect almost one fourth of Versace’s total employees around the world. Versace is expected to incur a pre-tax loss of EUR 30million, in 2009, as opposed to EUR 4,00,000 ($593,400) in 2008.
Apart from cutting jobs, Versace aims to rationalize production facilities, review its store network, reduce capital investment in 2010, and cut overheads as part of its reorganization plan.
Versace will lay off 350 employees, out of its 1,360 employees working globally.
Versace, famous for its Medusa head logo, is working towards boosting its bottom line in the year 2011. To achieve this goal, Versace has taken certain measures that it will execute in the middle of 2010.
The company plans to rebuild its Japanese operations and is re-evaluating the entire strategy of the company, said Versace earlier in October 2009.
Design head Donatella Versace, her brother Santo and her daughter Allegra own Versace.
Donatella, who is in charge of the fashion collection designs, is more focused in wearable outfits than Versace’s trademark glitz and gold.
“Trading conditions in the wake of the global financial crisis have been severe and the company expects to make a loss in 2009,” said Gian Giacomo Ferraris, chief executive of Versace, since June 2009.
“No organization can allow a situation like this to continue, especially considering the flat outlook for 2010.”