Luxury fashion house Gianni Versace SpA is reducing its losses and is therefore contemplating taking the company public. The Italian company reported a dramatic recovery from its loss of €92.4 million in 2004 to a loss of €5.5 million last year. Last September the company has forecast a loss of €15 million for the year.

Thanks to the sale of family assets, including its Manhattan town house, the company was able to report a pre-tax profit of €37.2 million. However, this fact was downplayed. “We’re sticking to our goal to turn a (operating) profit in 2007, but we don’t exclude the possibility that it will happen even earlier in 2006,� chief executive Giancarlo DiRisio told WWD. He added that the company would be ready for an initial public offering next year, although the decision obviously lies with the shareholders and the family. Currently, Donatella’s daughter controls 50 percent of the company, uncle Santo holds 30 percent and the remaining 20 percent are held by Donatella herself.

Sales for the year dropped 4.4 percent to €307 million, a slight improvement on earlier projections. According to DiRisio, the discontinuation of some product lines, like the diffusion collection Versace Classic, swimwear, innerwear and children’s apparel, affected revenues, but were partially compensated by retail and wholesales sales. Of the diffusion line Versus, he said it would become an “independent brand� from the luxury Versace label. Retail sales in the US rose 28 percent in the first four months of this year, thanks partially to the reorganization of its US subsidiary and the refurbishment of the New York flagship. The company is now working on the renovation of its Los Angeles store.

DiRisio noted that the focus on its signature collection and luxury items was proving a success for Versace. He pointed out that accessories sales growth more than quadrupled last year and now accounts for 19 percent of revenues or about €58.1 million. Furthermore, accessories should account for 30 percent of revenues this year, he said. With demand on the increase, the company is considering enhancing it production capacity in Burago, a suburb of Milan where the likes of Chanel and Hermes also manufacture their handbags.