BUSINESS leaders in Edinburgh have welcomed the prospect of Versace, the designer fashion store, relocating to the capital, after it closed its only Scottish branch in Glasgow.

The Italian company was reported to have given staff only 24 hours' notice that Saturday would be the last day of trading at its Ingram Street branch in the city's Italian Centre, the first to open outside Italy in 1991.

A statement by the company said: "As part of a global initiative to review all of the company's retail outlets, the company has decided to close its current Scottish location and has initiated a search for a new location."

It was reported yesterday that talks have been held between Versace and developers of Edinburgh's Walk fashion district.

Ian Perry, executive member for economic development at Edinburgh council said: "The recent success of Multrees Walk signals the health of the retail offering in the city and helps Edinburgh compete more effectively with other shopping destinations.

"Clearly, it would be a major coup for Edinburgh if we were successful in attracting Versace to the city."

He added: "They would certainly be at home alongside other top end names including Emporio Armani, Louis Vuitton and Calvin Klein and would greatly enhance Edinburgh's reputation as a retail centre."

Versace was located in Glasgow's Italian Centre in the Merchant City area, alongside other exclusive fashion stores including Emporio Armani and Cruise.

It was a favourite with footballers and celebrities.

However, the fashion house encountered difficulties after the death of Gianni Versace, its founder, in 1997.

Workers at the Glasgow store were reported to have been made redundant and the stock relocated to its London premises.

Some items at the store were sold off with up to 70-per cent discounts being offered.

Steve Spray, director of LaSalle Investment Management, agent for the developers of the Walk, was reported yesterday to have had meetings with Versace.

He told The Sunday Times:

"We have spoken to Versace in the past and will be speaking to them again this week in light of the announcement."