MILAN Italian top fashion house Versace is expecting higher revenues in 2012 after launching a collection for Swedish retailer Hennes & Mauritz (HMb.ST) this year and revamping its Versus second line, its head told Reuters.
The family-run company, whose lavish evening gowns are worn by stars such as Lady Gaga, is due to launch its collection for budget fashion chain H&M in November.
Versace is joining big fashion names such as Valentino, Lanvin and Missoni who have teamed up with trendy mass retailers to gain younger clients and revive their brand image.
The company draws most of revenues from its top Versace line, but it launched a "Young Versace" line for kids and bought back its Versus licence this year to boost sales and profitability after starting a deep restructuring in 2009.
"We are putting everything into place to further increase revenues in 2012. We are well beyond our initial targets," Chief Executive Gian Giacomo Ferraris said at a crammed Versace flagship store during Thursday's Vogue fashion night.
Ferraris, who joined Versace in 2009 from peer Jil Sander, confirmed the group will return to profit by the end of 2011.
Echoing top luxury peers such as LVMH (LVMH.PA) and Salvatore Ferragamo (SFER.MI), which are enjoying strong demand despite a weak economic environment, Ferraris said retail sales of the top Versace line were up 21 percent so far this year at current exchange rates.
Wholesale sales were up 20 percent in the first half of the year in line with expectations, he said.
In March, Versace said it was targeting revenues of more than 300 million euros (259 million pounds) this year, roughly in line with 9.1 percent growth in 2010.
The group reported total revenues of 292.3 million euros in 2010, above targets. Ferraris did not provide figures for 2012.
After founder Gianni Versace was murdered in Miami in 1997, Versace narrowly escaped bankruptcy in 2004 before starting a three-year restructuring plan under Ferraris.
As part of restructuring, Versace has cut minor licences to develop its own products. However, Ferraris said he will keep its contract with Luxottica (LUX.MI), the world's biggest eyewear maker. "I will not end it," he said.
Ferraris said in March the Versace family was neither considering selling the business nor floating for now despite being constantly courted by investors.
Gianni's sister, designer Donatella Versace, owns the company with her daughter Allegra and her brother Santo.
The Versaces' priority is to put the group back on a strong footing, Ferraris said. "They are totally committed," he said. ($1 = 0.729 Euros)
(Reporting by Antonella Ciancio; Editing by Raju Gopalakrishnan)
The Pentagon releases photographs linked to allegations of abuse of detainees in Iraq and Afghanistan.