Versace is to cut approximately a quarter of its global workforce and has forecast that it will post a loss this year.
The Italian fashion house said in a statement yesterday that these measures are a result of a declining demand for luxury goods during the current financial crisis and that it is taking measures to return the group to profitability in 2011.
Versace is the latest luxury fashion house to be hit by the recession. Christian Lacroix went into administration in June and German womenswear house Escada filed for bankruptcy protection in August. Both are reported to be close to a rescue deal.
Versace has a total workforce of 1,360 and said it would cut about 350 jobs worldwide as part of a company restructure that will also see it review its store network and production facilities, reduce capital investment next year and cut overheads.
Chief executive Gian Giacomo Ferraris told the Financial Times that Versace would make a €30m ($44m) loss this year with revenues expected to fall from €336m (£301m) in 2008 to €273m (£245m) this year and €270m (£242m) in 2010. He added that the company expects to record a loss of €400,000 (£359,000) for 2008.