October 12, 2016 / 5:26 PM / a year ago

UPDATE 1-Italy's Cavalli cuts jobs and closes stores in reorganisation

(Recasts and adds details on group reorganisation)

By Giulia Segreti and Massimo Gaia

MILAN, Oct 12 (Reuters) - Italian fashion house Roberto Cavalli will cut 200 jobs, move its Milan offices near to Florence and shut some stores under a reorganisation plan launched by new CEO Gian Giacomo Ferraris, the company said on Wednesday.

Less than three months after his appointment, Ferraris is aiming to cut costs by 30 million euros ($34 million) and return the company to profit by 2018.

The Florentine label has been going through a transition since Italian private equity Clessidra bought it in April last year to relaunch a brand popular with celebrities.

“The plan is necessary for a company that has had a stagnant top line for some years and for various reasons has increased its costs,” Ferraris told Reuters.

He said the company now had to be realistic and become leaner, and no-one would be spared from the belt-tightening.

Like many of its luxury goods rivals, Cavalli is facing a slowdown in consumer spending, particularly in China and among tourists, and because of the impact lower oil prices are having on the purchasing power of high-end spenders.

Cavalli’s revenue was 180 million euros in 2015 but that is expected to fall to 155 million euros this year.

Under the plan, which will be launched in the coming days, 200 jobs will go from the company’s workforce, which stands at 672 and is mostly based in Italy. Cavalli’s Milan corporate and design offices will be moved to the Tuscan town of Osmannoro, just outside Florence, where the group is based.

Ferraris said “a number” of stores would be closed or relocated, saying that those not performing or in less convenient locations, would be targeted.

He said, however, Cavalli would start opening new boutiques by mid 2017, and would focus on its menswear and accessories lines, the latter of which account for just 15 percent of sales.

A former head of Italy’s Versace, Ferraris met union representatives on Wednesday morning to present his plan.

“The fashion industry is facing uniquely challenging times ... only iconic brands with a coherent business model and an efficient organisation can survive,” Ferraris said.

Earlier on Wednesday, Cavalli said in a statement Creative Director Peter Dundas would leave his position after only three seasons, the spring-summer 2017 collection presented at Milan’s fashion week just over two weeks ago being his last.

According to a source close to the matter, the departure of Dundas was part of a broader shift in strategy.

“The first step was to call Ferraris as new CEO, the second to change its creative director. But there is absolutely no will to sell Cavalli,” the source said.

Norwegian designer Dundas was appointed creative director in March last year, taking over from 75-year-old Roberto Cavalli.

“As Roberto Cavalli goes through a period of transformation, the design team will carry on and the appointment of a new creative director will be made in due course,” the company said.

$1 = 0.8928 euros Editing by David Clarke

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below