mORE THAN TEN YEARS HAD PASSED SINCE GLANNL’S death, and Donatella continued to think of him every day. When she was nervous, she fingered that iron key to the gate of the Miami mansion. Despite the improvement in the collections, she batted away comparisons with her virtuosic brother, still keenly aware of her limits as a designer.
Nonetheless, the anniversary marked a new beginning for Donatella. Santo often reveled in the past, happy to recount war stories from Gianni’s glory days. Donatella was more chastened but had made a certain peace with her failures and achievements. By 2007, the narrative of the renewed Versace, of a battered house rising from the ashes, had taken root. Journalists were gentle with Donatella, dutifully noting her lost years, but they spared her too many uncomfortable questions. She submitted to interviews with practiced patience, parrying the same questions over and over again with grace and good manners, flipping her Barbie doll hair as she served up the telling quip. She exhibited far less of the verve and flamboyance that she had showed in the past. She often spoke soberly about her own mothering skills, opening a window into the guilt she felt about how little time she’d had for Daniel and Allegra over the years. At times, she seemed almost fragile, her hands shaking slightly as she sipped an espresso from a Versace bone china cup, and she still became endearingly nervous during television appearances.
The fashion business, with its bottomless hunger for something new, had become a treadmill for designers who must churn out frequent flash collections in between their semiannual runway shows. Donatella worked hard, going months at a time without a day off. Long-haul airplane trips became a rare escape, when she was unreachable for hours. She rarely dated and she admitted a certain loneliness, but she had long grown fatalistic about relationships.
She still visited the limestone grotto on the grounds of the villa in Como that housed the gilt box containing Gianni’s ashes, next to a framed photograph and a silver crucifix. On the day of the tenth anniversary, Donatella had sent to Villa Fontanelle five dozen red roses—Gianni would have been sixty that year—along with a single gardenia slipped in at the request of Allegra. But otherwise, Santo and Donatella rarely went to the Lake Como retreat.
For months at a time, the house that had sheltered the family’s best private and public moments—Allegra’s baptism, Donatella’s wedding, lazy visits with celebrity friends, a garden full of toys and children’s laughter, and many dazzling parties—was an empty shell. The large salon where a huge Christmas tree used to stand each year was barren, the maids dusting off Gianni’s beloved books and the desk where he sketched for hours. In the garden, the gliding swing under a magnolia tree where Gianni and Donatella often sat together was empty. In the living room, the speed dial on the phone was like a clock that stopped the moment Gianni died: New York Casa, Miami Casa, A. Wintour, Avedon Studio.1 The villa was a reminder of what life might have been had Gianni not been murdered that awful summer. Donatella and Santo had long stopped celebrating holidays together there. Indeed, Santo went there less and less often as he considered a new career in Italian politics, and his children left to attend college in New York and London. (In spring 2008, Santo was elected a member of parliament, representing Silvio Berlusconi’s center-right party.)
Ten years after Gianni’s murder, Santo and Donatella decided it was time to sell Villa Fontanelle. In early 2008, a Russian millionaire bought it for 35 million euros. Before handing over the villa, the siblings moved their brother’s ashes to a small mausoleum deep inside the gardens of Via Gesù.
Versace’s success remained uncertain in the years that followed. The violent economic downturn in the fall of 2008 hit the luxury sector hard. That holiday season was the worst in memory. By Thanksgiving weekend, department stores such as Saks had slashed the prices of its fall clothing, bags, and shoes by as much as 70 percent. Global sales of luxury goods dropped by one-fourth that month. Bulgari canceled virtually all of its planned new store openings, while Prada wallets turned up in the discount bins of Walmart. Yet the rebirth of Versace left it on far more solid ground to face the dire economic situation than would have been the case several years earlier. Back then, a recession of that magnitude would doubtlessly have swept away the company. Instead, Versace’s sales even rose slightly for 2008 to 336 million euros. But its profit was tiny at just nine million euros, boosted largely by the sale of Villa Fontanelle.
Giancarlo Di Risio hoped his strategy of pushing Versace into the priciest products would safeguard the house, betting that ultra-rich shoppers would hardly feel the downturn. Versace began designing the interiors of Lamborghinis, including one half-million-dollar model, as well as yachts, private jets, and helicopters: five million dollars would buy a bird complete with gold handles, plasma TVs, and plush leather Versace seats embellished with a Greek frieze motif, one of the house’s signature designs. The house was also working on designing a seven-star hotel in Dubai, complete with an underground system to cool the sand. Donatella’s collections continued to win kudos with the fashion press, although some pieces look so toned-down and genteel that they seem to have little Versace soul. Her team was churning out six collections a year that sold at stores such as Neiman Marcus, Saks, Barneys, and Nordstrom. The accessories business had grown from nothing in 2004 to 40 percent of sales, and Versace bags often had pride of place near Chanel in American department stores.
But as the recession deepened in 2009, there were signs that Versace was struggling. The men’s line limped along, struggling to find a clientele. Stronger houses such as Chanel began staging elaborate runway shows even for their winter cruise collection, while Versace could afford no more than a private showing with clients. For catwalk shows in Milan, modeling agencies favored houses such as Dolce & Gabbana over Versace, which hired far fewer girls. Indeed, the March 2009 season in Milan represented a sort of role reversal for Versace. The house had conspicuously few celebrities, planting just a couple of Italian soccer stars in the front row. A few blocks away, Dolce & Gabbana’s show resembled one of Gianni’s spectacles from his heyday, with Eva Mendes, Kate Hudson, Scarlett Johansson, Naomi Watts, and Lauren Hutton in the front row, along with Eva Herzigova and Claudia Schiffer, both former Versace models.
Versace’s lost years still dog the company, making it virtually impossible to close the gap with its rivals. Louis Vuitton’s shop on Avenue des Champs-Élysées in Paris makes as much as 90 million euros a year alone, more than a quarter of Versace’s entire revenue. And as in so many businesses, the new frontier lies in markets such as China, India, and Russia, which are all churning out thousands of new millionaires every year. The challenge is to sink millions into new shops and new advertising in these markets, while still keeping up in traditional regions in Europe and the United States. Versace has opened fifteen shops in China so far, but that pales in comparison to Armani’s fifty-five.
In the spring of 2009, a bombshell landed. After five years at the helm of the house, Giancarlo Di Risio announced his resignation. For months, he and Donatella had been at loggerheads over how the brand should react to the deep crisis.
For a number of years after her stint in rehab, Donatella had been happy to step back and let Di Risio have the upper hand in the house. The pressure of running the house after Gianni’s death was still fresh in Donatella’s mind, and she was relieved to be free of much of the burden for a time. Newly sober and feeling well for the first time in years, she was glad to have the space and freedom to tend to herself, as well as to Allegra, visiting the young woman frequently in the United States. Indeed, as Donatella celebrated one year after another of sobriety, the relationship between mother and daughter appeared to improve. Donatella and Allegra attended dinners and parties more frequently together, and Allegra began acting as a virtual cohost at Versace events, schmoozing a bit with retail executives, celebrities, and fashion editors. Meanwhile, Allegra herself became somewhat less reclusive, even turning up occasionally at nightclubs, once making the rounds of the hot spots of London with Kate Moss.
As Donatella felt more sure of herself, and Allegra seemed more settled, she grew increasingly impatient with deferring to Di Risio. Di Risio had set up large teams of designers for the accessories business and homeware products that reported straight to him, not to Donatella, who sometimes didn’t see the items until they were virtually ready to go on the market. For several years, she also quietly assented when Di Risio asked for changes in her ready-to-wear line.
However, by the start of 2009, the crisis began to weigh more heavily on Versace. In the first three months of the year, sales fell by 13 percent—hit in part by the bankruptcy of ITR, which stopped paying Versace royalties on its jeans line. Versace was still profitable in the first quarter and sales picked up in the spring, but by then, Donatella was convinced that the house needed a new leader—one who would take orders from the family, instead of giving them. With several years of solid collections and steady management of the atelier under her belt, Donatella felt more confident than ever. By then, she and Santo agreed that a slate of decisions made by Di Risio—for example, large investments in the accessories business and his plan to open new franchises—were the wrong responses to such a serious crisis. Di Risio argued that he was cutting costs quickly in reaction to the fall in sales, while the new stores, particularly in China, were important for future growth. But the family felt that didn’t go far enough, and now that they were free of the pressure from the banks—the debt was well under control—the family could reassert itself for the first time in five years.
Since coming into her stake, Allegra had been a largely passive presence in the house, hewing closely to the advice of her lawyer, Michele Carpinelli, and Marco Salomoni, a Versace board member with long experience in the fashion business. She diligently read the reports that Di Risio sent her on the developments at her company, but she virtually never attended board meetings. By early 2009, Allegra began spending a bit more time in Milan and in her mother’s atelier, although by then New York had become home, where she continued her studies. As the sales figures for the first months of the year reached her, she began to agree with her mother and uncle that it was time for fresh blood. While the pressure of such a change might have driven the family apart in the past, it now united Santo, Allegra, and Donatella. At the end of March, the family decided to hire Bain & Co., a leading consulting firm, to come up with a new plan to address the dire market. At that point, Di Risio understood that it was time to leave. He tendered his resignation in early June. A week later, the house hired Gian Giacomo Ferraris, the fifty-one-year-old chief executive of Jil Sander.
Even with a new chief executive, at some point, the Versace family will face difficult choices about what kind of future will best ensure the company’s enduring success and preserve its legacy. It can remain a niche player, running the risk of becoming irrelevant as other houses gradually crowd it out. It is too small to go public, so if it wants to grow, the family will have to consider selling out to a bigger rival such as LVMH or Gucci or to a deep-pocketed investor such as a private equity fund. Either way, the family would have little choice but to give up control. During the 2007 boom, when houses such as Roberto Cavalli had considered going public, investment banks had again proposed selling a piece of Versace to private equity or hedge-fund investors. But the family had declined. Indeed, as 2009 unfolded, Versace’s weakness became dangerously evident. In autumn, Ferraris announced he expected the house to lose 30 million euros for the year, while sales were likely to fall by nearly 20 percent, the lowest level the brand has ever seen. To stanch the red ink, the new CEO laid off a quarter of Versace’s employees and shut its stores in Japan, one of the world’s biggest luxury markets.
As a result, in 2009, Versace finds itself once again at the mercy of its founding family’s dynamics. And, as before, much hangs on the choices that Allegra will make in the coming years. Her health remains a private challenge and a corporate uncertainty. In early 2009, Allegra began spending more time in Milan and took up a desk in her mother’s atelier.
Once, when Allegra was very young, she was perched on the desk of her beloved uncle as he gave an interview to a journalist. The reporter, charmed by the sunny child, asked her, “Do you want to be a model when you grow up?”
“No, I want to be a designer!” Allegra retorted immediately, much to the delight of Gianni. But now Allegra is a sober twenty-three-year-old woman, and her wishes for her uncle’s company—and her own future—remain a mystery. She could choose to sell the house, freeing herself of an enormous emotional and business burden, in order to strike a path of her own. But that would surely leave her mother, at fifty-four, without a job. Alternatively, Allegra could maintain the status quo, hoping the house will catch a new wave of growth and collecting the meager dividends in the meantime.
The Versace story, in its drama and pathos, almost defies belief, a fairy tale that dissolved into a long, protracted horror story with the firing of two inexplicable gunshots. A hard-fought recovery has partly redeemed the years of woe and grief. But no matter what Allegra decides, the house will always be tinged with the sad knowledge that things will never be the same. Gianni Versace changed fashion forever. More than ten years after his death, one wonders whether his creation—for all its precarious recovery—is destined to become a relic of the past or a force for the future in fashion. The fate of the storied house rests as heavily as ever on the thin shoulders of Gianni’s beloved principessa.