>> After Dana Thomas's best-selling book Deluxe: How Luxury Lost Its Luster came out in August 2007, she wasn't invited to Louis Vuitton's show the following October — Vuitton chief executive Yves Carcelle was unhappy with how she had portrayed LVMH head Bernard Arnault. Given the article she just wrote for Newsweek, "The Tragic Decline of the House of Versace," she may be uninvited from Versace's show next.
Just last week, Donatella expressed that she expected Versace to weather the economy, despite having to lay off a quarter of its workforce. Thomas doesn't seem as convinced, suggesting that perhaps it's time for Versace to move past its family-centric setup:
"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 [Versace, Donatella's brother and former CEO of the company] was elected to the Italian Parliament. Allegra [Beck Versace, Donatella's daughter and 50 percent company heir] has been attending Brown University and has said her dream is to become an actress. And will Donatella remain at the helm? 'Maybe,' says [an anonymous] former Versace executive. 'Then again, maybe not.' Which, after a decade of turmoil, may be the best thing for the company after all."
Gianni Versace wanted the brand out of the family hands »
Thomas notes that Versace's sales have gone from $1 billion in 1996, when Gianni Versace was at the helm, to less than half of that today. Major retailers like Neiman Marcus and Bergdorf Goodman have dropped the line, and the buzz is not what it used to be. Backstage at the Versace men's show in June, Thomas writes, "The scene was positively dead compared with Versace shows a decade ago: no celebrities posing with Donatella for paparazzi, no bodyguards holding back the throngs, and no pals swilling champagne . . . It all felt feeble, pathetic — a sad, soulless charade to promote something that no longer exists."
Donatella and Santo have a resistance to change, the anonymous former Versace executive told Thomas, and though the company recently hired management consultants Bain & Co. to get everything back on track within three years, some think the recommendations — which were approved by Versace's board — may not help the brand, given the financial hemorrhaging. Even Gianni wanted to have the company out of family hands — he was in the midst of planning an IPO just days before he was murdered in 1997.