Last year marked brand’s “significant turnaround”, with £7.1m profit.
Gianna Versace SpA has announced that it returned to profit in 2011 after a rise in revenues of 16.4% to €340.2 million (£285m) from €292.3 million in 2010.
Retail sales generated through Versace directly operated stores were up 17.3%, reaching €161.7 million (£135m) for the year, while wholesale sales at €142.6 million (£118.9m) were up 22.5%.
The 2011financial year is described as marking a “significant turnaround” in Versace’s profitability.
EBITDA was €38.7 million (£32.2m), up 73% on €22.3 million in 2010, while the brand produced a net profit of €8.5 million (£7.1m), compared with a loss of €21.7 million (£18.1m) previously – a €30.2 million turnaround in bottom line profits.
Strong cash flows enabled the company to resume capital expenditure and to reduce its debt which stood at €29.5 million at the end of 2011.
Gross margin continued to improve, reaching 55.9%, considered a positive outcome considering start up costs for the brand’s diffusion lines Young Versace, Versus and Atelier Versace.
Gian Giacomo Ferraris, chief executive officer of Versace, 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.”
The brand bought back its Versace licenses in 2011, something it hopes to build momentum with in the coming years. It also moved into the Japanese market.
“Looking ahead, we are cautiously optimistic for 2012,” added Ferraris. “The Versace brand has great potential for growth in existing as well as new markets, even if expansion slows in the global market for luxury goods, as some forecast. Accordingly the company is targeting double digit sales growth for the next three years.”
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