Dolce, Gabbana strike out at tax claims

FASHION designers Domenico Dolce and Stefano Gabbana are at the centre of Italy's second-highest-profile case after former PM Silvio Berlusconi.

AS the Italian government attempts to recoup lost revenue from years of tax evasion -- an estimated E285 billion in unpaid taxes in 2012 alone -- fashion designers Domenico Dolce and Stefano Gabbana are at the centre of the country's second-highest-profile case after former prime minister Silvio Berlusconi.

In an exclusive interview with The Australian, Dolce and Gabbana described the E343.3 million fine ($516.8m) and 20-month suspended sentence handed down to them as being motivated by jealousy.

"We are not Berlusconi," Gabbana said curtly. "We make clothes. We are just fashion designers. All the people attack us and I think it is just envy. I don't think the customer cares."

They are appealing against the conviction.

Their plight degenerated into a damaging public spat in July with the city of Milan where Dolce & Gabbana is based and where they hold their fashion shows.

"We do not need tax evaders to promote us," the city's councillor for commerce, Franco D'Alfonso, said at the time.

Dolce and Gabbana fought back by closing their nine stores in Milan and posted signs on the doors that said "Closed For Indignation". Mr D'Alfonso later apologised and said his comments were taken out of context and Dolce and Gabbana dropped the bombshell that they might have to close their business entirely if they were forced to pay the hefty fine.

Dolce and Gabbana, who according to Forbes have a net worth of $US2bn ($2.21bn) each and are listed as 11th among the richest people in Italy, are just the latest victims of the Italian government's crackdown on tax evasion. Other big fashion names, including Roberto Cavalli and the motorcycle champion Valentino Rossi, have come under the spotlight, as well as foreign companies such as Apple, which has been accused of hiding more than E1bn in revenue from authorities.

Despite the legal troubles and threat of a shutdown, Dolce & Gabbana is expanding into new markets and opened its first Australian store on Melbourne's Collins Street in September.

"Our clients have been asking us for years to open a store there and it has not been easy to find the right location," Gabbana said. "It's a new continent for us."

The 300sq m, two-level store bears all the hallmarks of the glamorous Italian brand, with chandeliers, burgundy velvet poufs and smoky black mirrors. The store stocks the full range of the brand's men's and women's clothing, shoes and accessories.