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Gianni Versace returns to profit

Gianni Versace, the Italian fashion house, announced it returned to profit in 2011 after a 16.4% rise in revenues.

Sales rose from €292.3m (£243.8m) to €340.2m (£283.7m). Retail sales were up 17.3% to €161.7m (£134.8m) for the year and wholesale sales were up 22.5% at €142.6m (£118.9m). The company produced a net profit of €8.5m (£7.1m) compared with a previous loss of €21.7m (£18.1m). EBITDA rose by 73% to €38.7m (£32.3m).

Gross margin continued to improve and the company paid “rigorous attention to overheads” to help hold operating costs.

Chief executive officer Gian Giacomo Ferraris said: “We are very pleased with these strong results. When we announced the Company’s restructuring in 2009 we forecasted a return to profit by the end of 2011 on modest revenues growth. We far exceeded those expectations. 

“These results confirm the global appeal of the Versace brand, and the success of our strategy that is based on core Versace values of great design, leading edge fashion, strong brand management, and impeccable execution. 

“During 2011, we took back the Versus license, which had a short term impact on royalty income but which we believe will be a strong profit earner in future years. We launched new lines of business - such as Young Versace - and we invested in haute couture with Donatella’s spectacular return to showing in Paris earlier this year. Additionally, we re-entered the Japanese market, which we believe is a significant opportunity for the group’s brands.”

Ferraris said the company is “cautiously optimistic” about the year ahead but added the Versace brand has potential for growth in both existing and new markets. Therefore the company is targeting double digit sales growth for the next three years.

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