Italian fashion house Versace has slashed its level of debt.
Its losses have been narrowed thanks to a series of asset sales and a 21% rise in first-half retail sales, the fashion house said.
Versace has changed tack this year, softening its brash image into sexy but wearable clothes.
It also aims to develop more accessories, which make some of the juiciest profit margins in the luxury goods business.
Bags and purses only made up 4% of Versace's sales last year against more than half at some rivals.
CEO Giancarlo Di Risio said Versace's debt had fallen to about £23.6m from about £78.8m a year ago and could fall to £13.5m by the end of the year thanks to possible small deals and cost cuts.
Since Mr Di Risio took over the helm of Versace last year, the Milan-based label has sold non-core units such as its perfume arm and watchmaker.
It has instead signed licences for other companies to produce its scents and timepieces.
"There were a lot of microdeals that allow us to focus on our core business of clothes and accessories, which has drastically cut our debt," Mr Di Risio said.
"Versace is no longer a debt-risk company."
Versace, owned by three members of its founding family, made a net loss of £4.7m in the first half on turnover of £100.2m.
Full-year sales were seen coming in at about £202m with a net loss of less than £10m.
The company expects to return to profit in 2007.
