MILAN, May 10, 2006 / FW/ --- As financial reports roll in, the trend for luxury companies is up, including Versace that reported a 5.5 million euro loss, a big improvement from 92.4 million euros loss during the same period last year.

To the casual observer, one might say, ‘Being in the red is being in the red,’ yet considering that the modest lost is even better than Versace’s own forecast of a 15 million euro loss, it is definitely a good sign for financial analysts.

The maison has been staging its own revival for past one and a half years under the creative helm of Donatella and the leadership of company CEO Giancarlo Di Risio.

Focusing on the house’s strengths, the 1980s looks that defined the Versace DNA had been modernized and made contemporary while keeping the essence of the House. The result, the brand was introduced to a new generation, those who were just being born during the height of Versace’s popularity in the 1980s.

From the looks of it, the strategy is working. From the same financial statement, Versace reported that it has also reduced its debt load from a negative 79.5 million euros at the end of 2004 to a positive 2.1 million euros at yearend of 2005.

As part of its new marketing strategy, the company also discontinued several collections that included Versace Classic diffusion, swimwear and children’s apparel. Obviously, this cut into the revenues especially because the new lines that were unveiled last January and February would not be available in stores until this coming fall.

The company predicts that it would be back in black ink in 2007, but from the way it looks today, Versace can leap frog to it at year’s end.