Dana Thomas details in Newsweek how Versace became a bit of a mess after the death of Gianni. It used to rake in over $1 billion in sales, but now makes less than half of that. Run by the family since its inception, Donatella and Santo were reportedly resistant to changes that might have helped them adapt to new times and new economies. Thomas reiterates previous reports about ex-CEO Giancarlo Di Risio leaving the label abruptly earlier this year (after a five-year reign) over disputes with Donatella about cutting back her lavish lifestyle. (He apparently began trying to meddle in the creative side of things, which ultimately was the last straw for Donatella.)
Even when the family was slammed with an inheritance-tax bill that required them to take out a five-year, $100 million bond, the Versaces couldn't let go of their material things.
"There was zero expense control in the company, and the lifestyle was absolutely, positively insane," says the Versace source. "When the earnings went down, the lifestyle didn't."
But with the label bleeding money and readying to lay off 350 workers, the family has made concessions. Last year they sold their Lake Como estate, which is said to have devastated Donatella.
Many in the fashion industry believe it's time for the brand to continue without Versace family involvement—and some suggest that the family is starting to accept this idea too. Last year, Santo was elected to the Italian Parliament. Allegra has been attending Brown University and has said her dream is to become an actress. And will Donatella remain at the helm? "Maybe," says the former Versace executive. "Then again, maybe not." Which, after a decade of turmoil, may be the best thing for the company after all.
But the problem with this scheme is, who will be the face of Versace? Everyone knows Donatella and her ridiculously blonde hair and tan skin and high heels and tight clothes. That means something. Even when the world is in turmoil, we can always rely on her to show up to the party on a private jet with lots of shiny accessories and an entourage, with an air of quiet importance, looking just the way she always does. The label may need a financial and structural makeover, but something's so fascinating and comforting about that.
Fashion Disaster [Newsweek]