MILAN — Hit by the slump in luxury goods and the extensive restructuring plan masterminded by chief executive officer Giangiacomo Ferraris, Gianni Versace SpA last year had operating losses of 49.6 million euros, or $59.2 million, on a 19 percent fall in sales to 268 million euros, or $320 million.
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Losses before interest, taxes, depreciation and amortization were 2.4 million euros, or $2.7 million, in part due to a slash in Ittierre royalties. Net profit was unavailable. Currency conversions are at current exchange rates.
The results confirm a forecast made by Ferraris last fall, when he also predicted flat sales this year but a return to profitability in 2011.
“Besides the general weak demand, the results were influenced by a reorganization of our sales network via the closure of unsatisfactory relationships or ones that weren’t in line with the new product strategies,” said Ferraris. “The added value of this strategy will be evident in the future.”
He stressed that all the interventions strategized thus far have profoundly modified Versace’s business model and industrial assets but that “they were totally necessary to give the brand new success and make it competitive,” said Ferraris.
Furthermore, the affects of nonspecified restructuring costs, the devaluation of a number of assets and a contentious in China added up to 37.8 million euros, or $45.1 million, of nonrecurring costs.