Partying on the night of the Academy Awards earlier this month, Donatella Versace was as golden and burnished as Oscar himself.
The diminutive blonde made two heavily sequined costume changes as she partied at Elton John’s watch party and Vanity Fair’s annual extravaganza after the show.
As the figurehead of Versace — the Italian brand known as the show pony of the fashion industry — Donatella, 69, schmoozed with pals Elizabeth Hurley and her son Damian, along with Amazon tycoon Jeff Bezos and his fiancée, Lauren Sanchez.
But back home in Milan, trouble was brewing.
Plans, it seems, were afoot to oust Donatella from her longtime role as chief creative officer of Versace — the company founded by her brother Gianni — after she clashed with John D. Idol, the company’s chief executive, amid plummeting sales.
“Donatella is the only thing that drew anyone to Versace,” said a former employee. “They are trying to scapegoat her for all the issues, when anybody on the inside knows this came down to poor management.”
It all culminated in the announcement this week that Donatella would step down as lead designer to become chief brand ambassador, while Miu Miu’s Dario Vitale is joining as creative director on April 1.
Donatella, fashion industry sources told Page Six, is now banned from using her family name for any other brands she may launch.
Under the contract she signed when Versace was sold to Idol’s Capri Holdings in 2018, she also cannot design clothes for another company.
Things started to go downhill when Emmanuel Gintzburger was brought in as the CEO of Versace shortly after the $2 billion deal went through, Page Six is told, as Donatella felt that she was being deliberately pushed out of the company that bears her family name.
“The writing was on the wall from day one that [Capri] wanted to clip her wings,” said the former employee.
The mom-of-two had no problem working with the company to search for a successor, we’re told, and is the one who put Vitale’s name in the running — but “Donatella was starting to be undermined. Her creative direction was not being properly respected either.
“She went into this partnership with high hopes and she was doing what she thought best. She had no issue with a succession plan, but [Capri execs] had no respect for her as a human being, let alone as a Versace and as a visionary. She wanted to protect her family and her legacy. They didn’t give a s–t.”
In the end, Donatella was at Capri’s “mercy … they held all the cards,” said the former employee. “She can no longer use her last name. She can’t even design clothing. Period.”
Gianni Versace started the namesake brand in 1978 in Milan and it quickly grew into an industry favorite, beloved by Vogue and fashion insiders. He is known as the godfather of the ’90s supermodel era — having helped elevate such catwalk stars as Naomi Campbell, Linda Evangelista and Christy Turlington to icon status through his ads and runway shows.
It was a signal of just how beloved Gianni was that his most famous customer, and friend, Princess Diana attended his funeral after he was shockingly murdered by serial killer Andrew Cunanan in 1997 in Miami — a story revisited in “American Horror Story: The Assassination of Gianni Versace.”
The designer left behind an $800 million empire, with 50% of it going to Donatella’s young daughter, Allegra. Another 30% went to Gianni’s brother, Santo, and the remaining fifth to Donatella — who stepped up to helm the company.
Though she had no formal fashion training, she managed to turn the brand into a legacy powerhouse.
“She became a really beloved figure in the industry, largely because she is authentically herself,” fashion historian Nancy MacDonell, author of “Empresses of Seventh Avenue,” told Page Six. “When you are parodied on ‘SNL,’ you know you have cultural impact.”
Donatella turned those who wore her gowns into red carpet royalty, and has dressed every A-lister from Britney Spears to Kim Kardashian, Halle Berry to Gwyneth Paltrow.
Perhaps most famously, she designed the sheer green “jungle” gown that Jennifer Lopez wore to the 2000 Grammys. The moment was such a hit that it led to the creation of Google Images because so many people were searching online for photos of it.
By the time Capri bought the brand, it was one of the best known fashion names in the world. “The brand has a much bigger name than its annual sales,” Idol said around this time. “That creates a huge potential for us.”
Meanwhile, behind the scenes, friction was apparently tense. Italian execs referred to Idol as the “American cowboy,” according to the Wall Street Journal, which reported that he wanted “clothes that were more Palm Beach than South Beach.”
While the brand was known for its longtime Medusa logo, created by Gianni himself, Idol is said to have pushed Donatella to create a Versace monogram similar to Michael Kors’ “MK,” Louis Vuitton’s “LV” and Chanel’s interlocking Cs. A geometric Greca pattern was added to everything from handbags to coats, shirts and dresses.
In an effort to elevate the brand, Versace raised prices. The timing couldn’t have been worse.
With the acquisition, Capri reached $1.1 billion in revenues in 2023, but a slowdown in global demand for luxury goods turned that fortune around.
Between April and June of 2024, the company’s revenues decreased by 15.4%, resulting in an operating loss of $17 million, with significant sales declines reported in Europe and the United States.
And it doesn’t show signs of stopping any time soon: According to reports, the brand’s financial forecasts show sales falling from $810 million in the current financial year to $800 million in the next. In February, S&P Global Ratings downgraded Capri Holdings to what Bloomberg Law deemed “junk territory” — saying performance pressures and high borrowing could pose problems in repaying debts.
We have reached out to Versace for comment.
Speaking at a Vogue event in February, the day before her now-last fashion show, Donatella said: “Being told what to do, being told what’s going to sell … If you try to please too many people, too many managers, creativity is gone.”
Capri Holdings, which also owns Jimmy Choo, attempted to sell Versace in 2023 to Coach owner Tapestry for $8.5 billion, but the deal was killed in an antitrust battle. The entire company, including Michael Kors and the Jimmy Choo shoe brand, is now valued at roughly $2.3 billion — only slightly more than what Capri paid for Versace — according to the Wall Street Journal.
“When the Tapestry deal fell through it was a huge blow for Idol,” said a well-placed fashion insider. “I think that Capri thought if the deal went through, everyone would get rich and Donatella would be someone else’s problem.”
Idol is said to be working to sell both Versace and Jimmy Choo in order to focus on the relaunch of Michael Kors’s ready-to-wear brand.
A deal with Prada is reportedly now on the table and would bring the Versace brand back under Italian ownership — although, during Milan Fashion Week earlier this month, Miuccia Prada said the Versace deal was “on everyone’s table.”
Although Donatella will “always be the DNA of the brand” and “people adore her … her relationships run so deep,” the reality is that there had to be a succession plan, said the insider.
MacDonell predicted: “I don’t think Versace will continue to look exactly the way it has, but its strengths are its brashness and its strong sense of identity — especially important when so much of fashion looks the same — which is what Vitale will have to mine to move forward. He was tremendously successful at Miu Miu. The brand’s sales were up 97% last year.”
And while you may be able to take the girl out of the brand, you’ll never be able to take Versace out of Donatella. As she said this week, “Versace is in my DNA and always in my heart.”
“This is the way to ensure the brand outlasts her. She’s had amazing red carpets, but the brand needs to be more than that. It’s a classic story of an Italian brand not knowing how to evolve and work with business people — but also the sign of a business person [Idol] who didn’t know how to get the most out of their creative talent.”
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