by Deborah Ball
Versace was a potential hand grenade for any executive, and indeed the company had failed to lure a star manager from one of the best-run fashion houses. But Di Risio decided to risk it, perhaps anxious to redeem his reputation after his bumpy tenure at Fendi. Allegra’s decision to exercise her stake with the help of an outside lawyer who had the trust of Versace’s creditors would make his task immensely easier. But the banks’ patience wouldn’t last long. And even though Donatella was now a minority shareholder, she was still a wild card. If the rehab program failed and she slipped back into her old ways, she could still cause chaos.
Soon after returning from an August holiday in the Caribbean with her mother, Allegra, with Carpinelli by her side, voted to approve both the new board and Di Risio’s nomination as CEO. Donatella also gave her assent. Santo, who had quietly lobbied for Di Risio for months, voted in favor as well. Santo remained president but was now powerless. Nearly thirty years after joining Gianni in Milan and after seven years of woe, Santo was set adrift. Allegra had effectively voted her uncle out of a job and put her mother on a very short leash.
When the staff returned from their summer holidays, they held their breath. They had read news reports about Donatella’s rehab stint and the deal with the banks. Many doubted whether the latest coup de théâtre could really mean the end of years of drama and intrigue. The next runway show, just a month away, would be decisive.
Donatella returned to Milan a changed woman. She had always been a black-or-white personality, someone drawn to the extremes. So just as she had hit bottom with a decisive thump, she bounced back just as resolutely. Many addicts take several stabs at rehab before they manage to stay clean, but Donatella was ready to embrace the program that promised to help her regain control of her life. When she came back to Italy, she was chastened by the damage caused during her wilderness years and wanted to finally make amends. She would never touch drugs again.
On her return to the office, she warily took the measure of her new CEO. She knew Di Risio somewhat through their dealings over the Versus line, but she had never worked closely with him. Without the haze of drugs, she could size up her situation with the brutal pragmatism that had once given her the courage to tell Gianni when he was being wrong or pig-headed. The banks and her daughter were in control of the house, and they had invested Di Risio with full power. He held all the cards. If she wanted to remain creative chief of Versace, she had to find a way to work with the man.
Within weeks, it became clear that Di Risio could be an ideal antidote to what ailed Versace. To be sure, his strengths lay in the nuts and bolts of logistics, distribution, and factory organization that had made Ittierre run like a well-oiled machine, and he lacked some of the depth of a manager of international caliber. His sparse English was also a problem. But since he knew Versace well, he wouldn’t face the steep learning curve that would leave other executives vulnerable to palace intrigue. He had also learned how to deal with capricious families during his stint at Fendi.
Even his somewhat peculiar personality was reassuring to the traumatized company. Di Risio would be happy to leave the limelight to Donatella. His southern heritage was a plus in a company still proud of its Calabrian roots. More important, his ascetic style helped leech the emotion and personal drama out of a house where work-life boundaries were almost nonexistent. Unlike Donatella, he never got involved with his associates’ personal lives. And unlike Gianni or Santo, he wasn’t the convivial boss who wandered amiably into managers’ offices to check on their work. Instead, he had his secretary summon associates to his office when he needed something. There they noticed that Di Risio’s desk was bereft of photos of his family, and even top Versace executives never met his wife or children. He rarely smiled and scrupulously used the formal lei with even the closest colleagues. Donatella insisted he address her with the informal tu. He assented, but it clearly made him uncomfortable. His detachment was a relief to the staff.
Donatella quickly pegged Di Risio as someone who lacked creativity, which was a black mark in her book. He had a level-headed approach that came from his low-key personality and the knowledge that he was in control. But he was unfailingly polite and diplomatic with her, careful not to turn their relationship into a battle of wills. While he summoned other executives to his office, he made a point of going to Donatella’s when they needed to speak. Undoubtedly, he had little of the verve she admired in other people, but he gave her the respect that she craved. In her battered state, that meant a great deal.
Moreover, he was willing to make the changes that she knew were needed but lacked the courage to carry out. Di Risio arrived to find a traumatized staff. Even the palazzo on Via Gesù looked like a battleground, with litter strewn in the glorious gardens and broken mirrors and furniture going unrepaired. More than 1.4 million euros of unsold clothes, bags, and shoes were piled up in warehouses.2 The only marketable asset Versace had left was its name. With a mixture of relief and regret, Donatella decided to trust him.
Working from 7:30 a.m. until midnight, Di Risio tackled problems that had been festering for years. He began dismissing people who had been entwined in Donatella’s personal life but whom she lacked the courage to fire. He hired a new menswear designer and told him to get rid of the DV logo and replace it with a sophisticated gold and black label. He cut ties with the outside stylists who had led Donatella astray by pushing for controversy on the runway rather than sales in the stores. He then moved Donatella and her design team from Via Gesù into the business headquarters on Via Manzoni so they would meet regularly with his new sales team. Donatella could no longer ignore the bean counters.
The first test of their relationship came as Donatella and her team prepared the collection for the October 2004 runway show. Donatella’s own staff watched her skeptically, looking for signs of a slip. For years, they had dreaded the weeks before a show, when they became lightning rods for all her frustration and paranoia. Moreover, their new chief executive was clearly determined to have a say in the atelier. Soon after his arrival, he upset Donatella by telling her the house could no longer stage couture shows. Donatella still harbored a dream of putting the couture collection back on the runway, but Di Risio refused to sink any more money into the loss-making business. The atelier could still make red-carpet gowns, but it would display them in private showings with clients.
Di Risio gave Donatella and her team clear directives for the October 2004 show. He wanted a cleaner, more sophisticated collection. The team could use the medusa head only sparingly and tastefully in order to restore the logo’s prestige. They had to pay closer attention to the fit of the clothes and include more wearable, basic items—not just eveningwear made for willowy models—and follow a strict design calendar so that the factory had time to make the clothes. But Di Risio sugared the pill by giving Donatella a generous budget to buy fabrics, make up samples, and stage the show. He called an end to lavishing clothes on celebrities willy-nilly but signed off on using Madonna in the advertisements for the collection. And as long as Donatella followed the guidelines he laid down for the collection, she was free to come up with whatever designs she wanted.
The atelier staff wondered if she was going to buck. But she didn’t. Even if it was painful, she was finally ready to trust someone. In meetings with her team, she was clear and calm, turning up at work punctually at 10 a.m. and methodically running through the myriad preshow decisions. At meetings, her closest assistants turned to one another, eyebrows raised in amazement.
In the early days of the new regime, Donatella’s priority was to safeguard her recovery and repair her relationship with her kids. She spoke often with Elton John, and had her assistants budget time in her schedule for regular phone calls to her recovery peers abroad. Italy has little in the way of Narcotics Anonymous meetings, but when she traveled overseas, she attended twelve-step gatherings. She spent all of her spare time with her son. Daniel, then thirteen, was growing into an exuberant teenager, crazy about soccer and rock mus
ic. Donatella pushed for business meetings to end on time so that she could curl up on the sofa at home to watch a soccer game with him or listen to him play in his high school band Nucleus.
Despite Donatella’s newfound equanimity, the show in October was the hardest thing she had done since her first solo presentation after Gianni’s death. It was her first one ever without the crutch of drugs. There were none of the celebrities the house often used to distract attention away from the trashy clothes. As the models filed out onto a clean, simple runway, Donatella stood backstage shaking, clutching the hand of a close assistant. Despite the nerves, her more peaceful state of mind shone through. She showed draped silk jersey dresses with flirty fishtail skirts, white trouser suits, halter-neck dresses in pastels, and a luscious lemon-yellow draped gown. The medusa medallion subtly punctuated the base of the spine on a short white dress that dripped with crystals. For daytime, there were safari-like jackets and satiny chemise dresses.
After the last model filed backstage, Donatella stepped onto the runway. She glowed with health, beaming a heartfelt smile as the audience jumped to its feet. Despite all its cattiness, the fashion world was rooting for Donatella and the revival of Gianni’s house. Santo stood in the audience, applauding warmly. When she was safely backstage, Donatella burst into tears. Afterward, she held an intimate dinner for forty in her own apartment rather than the usual postshow megafete in Via Gesù.
The successful show gave fresh momentum to Di Risio’s race to revive the house before the banks’ end-of-year deadline. Donatella and Santo stood by while Di Risio dismantled cherished bits of Versace history. He put the New York townhouse on the block for $30 million and sold the licenses for Versace perfumes and watches to outsiders. The rest of Gianni’s contemporary art collection—including works by Roy Lichtenstein, Jean-Michel Basquiat, Henri Matisse, and Marc Chagall—would go to auction in the new year. The last bit of Gianni’s original headquarters on Via della Spiga was sold. Finally, Di Risio wrote off millions of euros’ worth of goods that sat unsold in warehouses and boutiques.
By casting off the dross, Di Risio could home in on the more promising nuggets: the core men’s and women’s lines. If he could restore the prestige of the top collections, the house might win back its luxury cred with retailers and high-end shoppers. Then it might add the sort of less-expensive lines that swelled the coffers of Prada, Armani, and Louis Vuitton. But first he shrank the business drastically. Sales for 2004 would be just 328 million euros, down 20 percent from 2003 and a third less than when Gianni died. That year, Armani was four times the size of Versace, and the Gucci group nearly five times. Despite its famous name, Versace was now little more than a niche player.
Just days before Christmas 2004, Di Risio sat down with Versace’s creditors. Without the asset sales, Versace would have lost nearly 100 million euros that year and been technically insolvent. By hawking the licenses and the real estate, the house instead turned a profit of 104 million euros. More important, the debt fell from about 120 million euros when he arrived to 84 million euros. To his relief, the banks approved. With the emergency phase over, Di Risio could begin rebuilding the house, brick by brick.
Providence, a gritty smokestack city in Rhode Island, is as unlikely a destination for a European heiress as one could find. With its blue-collar populace and high unemployment rate, it is one of the grimmest metropolitan areas in the northeast. Brown University sits on a hill in the heart of the city, its stately buildings a world away from the industrial neighborhoods surrounding the campus. The privileged kids who descend on Brown each year are as different from the locals as chalk from cheese.
In September 2004, as Donatella and Di Risio hammered out their relationship in Milan, Allegra arrived in the New England city to join the incoming class of 2008. Eager to try to be a normal American college student, she had decided before leaving Milan not to join the board at Versace, preferring to entrust the company to her lawyer and the new board. She dreamed of escaping the strife of her life in Italy and becoming an actress. Donatella had agreed to let her pursue her dream until she turned twenty-four. If she didn’t succeed by then, she would go to work at Versace.
As Allegra grappled with a new life, her mother was steadily finding her feet in a sober world. Donatella was remarkably open about her past, publicly and privately admitting her mistakes. In press interviews, she surprised journalists with frank answers about her drug habit, recounting private details of her stay in Arizona and admitting the fallout her addiction had had on her children. Her no-excuses approach went far to deflate the prurient curiosity about her drug use and wildness. Free of the haze of drugs, the witty, generous Donatella of old came through. In the atelier, she coddled the staff who had stuck close by her. In 2004, when the photo shoot in London for the Madonna ad campaign fell during Thanksgiving week, as a treat for the Americans on the team who had to miss the holiday, she organized a full Thanksgiving dinner in her suite at Claridge’s hotel, including turkey-themed decorations and Indian headdresses. Over time, she softened her look, wearing her long hair in loose waves or ringlets and lightening her makeup. She adopted a polished uniform of close-cut tailored pants, topped with a T-shirt and a jacket in the summer or a fitted coat in the winter. She got back into shape, working with a personal trainer in her apartment each morning, blasting rock or pop music at full volume and singing at the top of her lungs as she walked on a treadmill.
In the atelier, she displayed a new confidence in her own instincts, and she stopped the anguished second-guessing that had paralyzed her for so long. Her team had her full attention for the first time in years. Taking clear leadership of the meetings, she could finally tap her sixth sense of what was hot, homing in quickly on ideas that would work. She got rid of three elements that had characterized Gianni’s style: bright colors, very revealing clothes, and a great deal of embellishment. Times had changed. The conspicuous consumption that Gianni celebrated was passé in the 2000s, when stealth wealth—perfectly cut clothes, luxurious fabrics, subtle finishings—marked the new sensibility. Dress rehearsals that once dragged on until 3 a.m. or 4 a.m. as a frustrated Donatella demanded more and more changes now finished in as little as thirty minutes. The collections grew stronger each season, finding a balance between Versace’s signature sexiness and polished, pulled-together sophistication. She focused more on monochrome tailored clothing. One season, she showed an assortment of navy outfits that had leather piping that formed stylish V’s. In another, she did a collection largely in white.
In May 2005, for her fiftieth birthday, two close assistants threw a surprise party for her at Mr. Chow’s, a Chinese restaurant in Manhattan popular with celebrities. She was just the age Gianni had been when he was killed, and she was hardly anxious to celebrate the milestone. But when she walked into Mr. Chow’s, she found two dozen friends who represented the happiest time of her life, including Mario Testino, Helena Christensen, Linda Evangelista, the hairdresser Oribe, and makeup artist Pat McGrath. Allegra, Daniel, and Paul were also there. It was Donatella’s first sober birthday celebration in years, and she felt overwhelmed. Trying to break the tension of being the object of attention, she hammed it up, making the rounds of the tables and quipping, “Hello, I will be your server tonight. Can I take your order?”
Having won a reprieve from the banks before Christmas, Di Risio dug in in 2005, year zero for Versace. Early each morning, he walked to work from a pied-à-terre not far from the Versace headquarters. By then, he was dressing head to toe in Versace, wearing conservative suits from the house’s top menswear line. He traded his Hermès ties and fine Swiss watches in for Versace versions. Di Risio’s straightforward, no-drama approach gradually set the tone in the house, and the intrigue-ridden atmosphere melted away. His measured presence belied the deep changes he was making. He replaced every single senior executive, from the public relations chief to the head of sales, freeing his management ranks of the baggage of Versace’s messy past. (Many of the new arrivals faced pointe
d questions from friends and colleagues who viewed Versace as a surefire career buster.)
Di Risio reined in Donatella’s spending, cutting the private jets and holidays paid for by the company. (As befit her VIP status, Donatella still flew first class—preferably Air France—and always sat in a window seat to shield her from other passengers’ prying eyes.) Managers got bonuses if they came in under the tight new budgets he imposed. The house’s travel spending fell by half, and the cost of runway shows dropped by 40 percent.
The new team then did a detailed analysis of the performance of each shop, a first for the house. The results showed disaster. The top-priced collections were too thin to fill the huge shops, so sales managers were padding them with a hodgepodge of cheaper licensed items and secondary lines. Many boutiques still sported the overwrought look of Gianni’s era, heavy on baroque finishings that now looked kitsch and gaudy. Window displays were often tatty and differed from shop to shop.
Early in 2005, the new management began rolling out a fresh design in all Versace shops. Black marble, leather furnishings, enamel ceilings, and crystal bead curtains replaced the medusa logos and garish embellishments. A new layout left ample space for eyeglasses, perfumes, and leather bags near the entrance, and a fresh window display went up in all the shops. Sales in the revamped boutiques immediately surged 25 percent. Other stores that were too big or that underperformed—including the huge boutique on Madison Avenue that Santo had long protected despite heavy losses—were shuttered.
Meanwhile, Donatella’s collections were finally winning plaudits from her harshest critics. Early on, the reviews had been cautiously positive, but by the end of 2005, she’d garnered three seasons in a row of kudos. In October, she felt confident enough of her own reputation to dare an ironic take on Gianni’s era, opening the show with five Amazonian models striding down the runway in beige outfits, a coy reference to Armani’s signature color. Her personal appearances and preshow press conferences were smooth and polished, sending a reassuring message to retailers that her wilderness days were over.