By Manuela Mesco and Deborah Ball 

Florence-based fashion house Roberto Cavalli SpA announced the departure of its designer, as it embarks on a reorganization under new management.

The design house, famous for its provocative styles and a favorite among celebrities, said Wednesday that creative director Peter Dundas will leave after two years with the house. Mr. Dundas's design team will carry on with the collections until a new creative director is appointed "in due course," the company said.

Mr. Dundas couldn't immediately be reached to comment.

The move is the opening shot in a wide-ranging overhaul under new Chief Executive Gian Giacomo Ferraris, who is seeking to slim down and refocus the house in the midst of a global slowdown in the luxury goods industry.

The news from Cavalli follows management changes at other European fashion houses, including Kering SA's Bottega Veneta, Hugo Boss AG and Burberry Group PLC, which are bringing in new blood in response to the fresh challenges of the luxury market.

Last year, Italian private-equity firm Clessidra bought a 90% stake in the fashion house. Founder Roberto Cavalli holds the remaining 10% stake. In July, the company said that Mr. Ferraris, who led a successful turnaround at Gianni Versace SpA, would become its new chief executive.

Upon his arrival, Mr. Ferraris said in an interview, he found operating costs had grown by about 30% in four years, with design headquarters in Milan in addition to offices in Florence. The company had also splashed out on stores that were too large. Even before the arrival of Mr. Ferraris, the house sold its Paris flagship store.

Now, Mr. Ferraris is embarking on deep cost cuts, with plans to centralize the house's administration in Florence and cut 200 jobs. He will close unprofitable stores, including those in Vienna and Madrid, and relocate others. Remaining stores will get a face-lift.

"This is a comprehensive restructuring plan," said Mr. Ferraris, adding he doesn't expect the company to grow next year. "Our priority now is to strengthen the company, then we'll look at making it grow," he said.

Despite its popularity, Roberto Cavalli has remained a minnow in the fashion world, even as Italian rivals such as Giorgio Armani grew. In recent years, the house's designs lost their luster and it stumbled in its attempt to expand into leather accessories. "It lost relevance," said Mario Ortelli, analyst at Bernstein.

In 2015, sales were EUR180 million ($199.8 million), down 14% from a year earlier, owing to a fall in licensing fees and a decline in sales to Russian shoppers, who have traditionally flocked to the house. The company posted an operating loss of EUR1.6 million.

Write to Manuela Mesco at manuela.mesco@wsj.com and Deborah Ball at deborah.ball@wsj.com

 

(END) Dow Jones Newswires

October 12, 2016 13:32 ET (17:32 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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