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Trouble Brews As Profits Fall at the House of Versace

Giancarlo di Risio with Donatella in 2006, when
times were merry.

Last week, reports surfaced that the CEO of Versace, Giancarlo di Risio, was about to step down due to differences with Donatella Versace and family over how to run the company. The Versace family, which owns the company, quickly issued a statement denying the reports. But the rumors haven't quieted. Last night, the company's board held a meeting to reportedly discuss the fate of Di Risio. Insiders say Di Risio got on Donatella's bad side in disputes over creative control. Among their disputes was the cheaper line Di Risio wanted to launch, to be designed by someone else. The lower-priced line of clothing and accessories, called Versus, did eventually launch for spring 2009, designed by Christopher Kane. Di Risio was also reportedly upset that the Versace family insisted on hiring Mario Testino to shoot the brand's ad campaigns, since he charges $140,000 a day. Nonetheless, Di Risio went before the public in January to inform the world that despite the price cuts across the industry, Versace would not lower its prices.

Following last night's meeting of the board, which includes Donatella and her brother Santo, the company announced it had approved a plan drawn up by a consulting firm to steer the company in the right direction in these troublesome times. Versace reported first-quarter losses of 13.4 percent. Di Risio had no involvement in drawing up the plan, according to insiders. Yet the Versaces issued another statement yesterday denying reports of "friction" between Donatella and Di Risio over cost cutting. They did not address whether the CEO would step down, though insiders expect him to leave his post within a few days. After all, why pay for both a CEO and a schmancy consulting firm? Then again, they spend $140,000 a day on a photographer — plus fees for spring 2009 faces Kate Moss and Gisele Bündchen — so maybe that's something they would do. Money, it grows on trees.

Versace Board Approves Plan Sidelining CEO [WSJ]
Will Versace's CEO Get The Boot? [Luxist]
Related: Versace Not Putting Things on Sale to Keep the Riffraff Out

Photo: Getty Images

Copyright © 2013, New York Media LLC. All Rights Reserved. The Cut® are registered trademarks of New York Media LLC.

Copyright © 2013, New York Media LLC.
All Rights Reserved.

Copyright © 2013, New York Media LLC. All Rights Reserved.

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