Italy's one-time fashion king attempts to reverse sliding profits

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ROME--Italian fashion house Valentino is planning to invest $81.4 million to revamp its brand name as part of an effort to return the company to profitability by 2003.

Spearheading the company's makeover is the redesign of the world-famous "V" logo, making the lines surrounding it more circular and fluid. The first products are expected to be shipped with the new logo by early July.

The company also plans to take greater control of its marketing by bringing the bulk of strategic decisions in house. The company, however, will continue to work with an array of advertising agencies in individual markets.

Valentino will start producing a higher number of products in-house while reducing the number of licensing agreements for products from 50% to 10% by the end of the year. An in-house distribution system will mean that 65% of the company's products will be sold directly by the company in 2002, up from only 1% last year.

Founded in the 1960s by Valentino Garavani, a designer often referred to as "The Sheik of Chic," the company has seen its market share and profits shrink since 1998.

Copyright June 2000, Crain Communications Inc.

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