Top Italian luxury goods firm Versace said Wednesday it will cut a quarter of its workforce and expects to report a loss for 2009 as demand for its products has shrunk in the economic crisis. It announced a cost-cutting plan to axe around 350 of its 1,300 workforce and review branches and investments as part of a 'comprehensive corporate reorganisation,' but gave no further details. It said it aimed to return to profit by 2011, after the recent downturn sapped demand for its upmarket clothes, handbags and sunglasses. 'Trading conditions in the wake of the global financial crisis have been severe and the company expects to make a loss in 2009,' Versace's chief executive Gian Giacomo Ferraris said in the statement, without giving a figure. Ferraris said Versace still had strong growth prospects, however, as one of 'the most powerful brands in the luxury industry,' noting the buzz created by artistic director Donatella Versace's latest spring and summer collection. The group announced earlier this month that it had closed three stores in Japan, a key market for luxury goods that recently re-emerged from a recession. Versace's former chief executive Giancarlo di Risio left in July in what the group called a 'mutual' decision. Press reports had cited a disagreement with Donatella Versace. The fashion house denied rumours that she had opposed cost-cutting measures imposed by the manager to combat the financial downturn. Her brother Gianni Versace, known for designing glamorous and sexy outfits, was murdered in Miami in 1997, aged 51. Di Risio was appointed in 2004 to restructure the business, which had been in crisis since the murder, and managed to restore the company to profit over the next few years until the global crisis hit. Worldwide, fashion has struggled over the past year, with widespread store closings as well as buyouts, layoffs and dire predictions that consumers may never reprise their old spendthrift ways. Italy has seen a sharp drop in exports of ready-to-wear women's apparel, putting tens of thousands of jobs on the line. SMI, which represents some 60,000 businesses in the clothing sector, said some 56,000 jobs were at risk from among the sector's 510,000 workers. Italian fashion company Ittierre, owner of the Gianfranco Ferre brand, filed for bankruptcy in February. French couture house Christian Lacroix, citing the luxury market's doldrums, filed for bankruptcy in June. A sheikh close to the ruling family of the United Arab Emirates has made a formal offer of 100 million dollars (68 million euros) for Lacroix and is regarded as the frontrunner among the takeover bidders. Judicial administrator Regis Valliot has praised the sheikh's commitment to save jobs, tackle the company's bills and rescue the fashion house. Also bidding are Bernard Krief Consulting and La Financiere Saint Germain. Italian retailer Borletti withdrew its offer. 