MILAN/PARIS (Reuters) - Italian fashion brand Versace is going ahead with plans to re-enter Japan this year despite the quake-hit country’s woes, Chief Executive Gian Giacomo Ferraris told Reuters on Tuesday.
After the family-run company unveiled 2010 results above its own expectations, Ferraris said Versace was on track to meet its target of becoming profitable by the end of this year at the operating level.
He said the Versace family had no plan to sell the business.
Versace planned to open four outlets in department stores in quake-hit Japan starting in September, Ferraris said in an interview. It shut its Japan business in 2009 as part of cost-cutting moves.
“I am confident in Japanese resilience and that we are entering Japan at a perfect time,” he said.
He said Versace had been constantly courted by potential buyers but the Versace family wanted the company to “remain independent in the long term.”
“The company now has nearly no debt, it is financially healthy and the owners do not want to sell,” Ferraris said.
Analysts expect a new wave of mergers in the luxury sector after French giant LVMH (LVMH.PA) agreed to buy Italian jeweller Bulgari in a 3.4 billion euro deal.
Founder Gianni Versace was murdered in Miami in 1997 and Versace narrowly escaped bankruptcy in 2004. Gianni’s sister, designer Donatella Versace, owns the company with her daughter Allegra and her brother Santo.
Ferraris, who joined Versace in 2009 from fashion house Jil Sander, said 2011 would be a turnaround year.
He said the group had the financial muscle to grow after slashing its debt to 30.5 million euros last year from 80 million euros at the end of 2009.
Versace is targeting revenues of more than 300 million euros in 2011, roughly in line with a 9.1 percent growth last year after restructuring.
The group reported total revenues of 292.3 million euros in 2010, above targets. Core earnings rose to 22.3 million euros last year from a loss of 2.4 million euros in 2009.
The group announced on Tuesday it was buying back its Versus licence from Swinger International in order to compete with such brands as Prada’s Miu Miu and Dolce&Gabbana’s D&G.
The group does not plan to increase its top line prices despite rising raw materials costs, the CEO said.
Ferraris said Versace employed 1,150 people worldwide. It has hired staff after cutting a quarter of its 1,300-strong global workforce in 2009 and shutting its Japanese business.
The brand makes 30 percent of its turnover from Greater China, about 45 percent from Europe combined, 10-12 percent in the Middle East and the balance in the United States.
Overall, the fashion brand said it would have 80 to 85 boutiques worldwide, up from 77 now, by opening outlets in places such as Europe, the United States and Japan. (Editing by David Cowell)