UPDATE 1-Versace swings to profit, plans to expand in Asia

(Adds CEO comments, byline)

By Jo Winterbottom and Elisabetta Andreis

MILAN, March 29 (Reuters) - Italian design house Versace -- whose 20-year-old half-owner is battling anorexia -- swung to an net profit of 19.1 million euros ($25.48 million) in 2006 and said it would open more stores in Asia this year.

But the company won't decide whether to sell shares until the end of 2008 at the earliest, Chief Executive Giancarlo Di Risio told Reuters in an interview on Thursday.

"The owners won't think about the stock market before the end of 2008, then we'll see what to do," Di Risio said.

The fashion house, which dressed British actress Elizabeth Hurley when she married Indian businessman Arun Nayar this month, is owned by Donatella Versace, her brother Santo and her daughter Allegra.

Allegra, a student at Brown University in Rhode Island who owns 50 percent of the company, is suffering from anorexia, her mother Donatella and father Paul Beck said on Wednesday, in response to press reports over her health.

Donatella took on the role of designer after her brother Gianni, who founded the company, was murdered in 1997 outside his Miami Beach mansion by serial killer Andrew Cunanan.

Versace has increasingly moved away from flamboyant fashion to aim for the luxury market and now designs jet and yacht interiors as well as womenswear and menswear collections.

It said 2006 sales slipped to 288 million euros from 306 million as it ended some licensing deals, but that still beat its expectations of 276 million euros.

NINE NEW STORES IN CHINA

"The aim is to get the business to the point where it has all the parameters to go onto the stock market," Di Risio told Reuters, adding that "it's a decision for the owners".

He said the company would focus on Asia and planned to open 10 boutiques there this year -- nine in China, where it already has five outlets, and one in Taipei.

"Asia should become second place to Europe for us," Di Risio said, taking over from America. Production will stay in Italy.

Versace, which said it had 11.3 million euros of cash at the end of 2006, "will spend it all", Di Risio said.

Di Risio said the company would open its second hotel in 2009 in Dubai and planned to have 15 altogether over the next 15-20 years.

Several other fashion brands such as Giorgio Armani and Valentino are also moving into areas such as hotels or interiors as they seek to get the most from their brands.

In 2005, the design house had a profit of 30 million euros due entirely to one-off items, without which it had an operating loss of 5.5 million euros.

Versace said accessories -- which have fat profit margins -- had exceeded its target in 2006 for 30 percent of total sales.

Donatella's latest womenswear collection, shown in Milan in February, featured trademark glitz and silver, which sparkled on the soles of high-heeled shoes or for details on a white fur and leather coat.