>> Versace is definitely feeling the economic crunch, completely pulling out of Japan, where it's had a presence since 1981, and announcing impending layoffs of over a quarter of its current workforce.  But Donatella Versace aims to keep up appearances — she sponsored the Whitney Museum Art Gala in New York two weeks ago, jetted off days later to Rio de Janeiro for a Fashion Rocks event, and has just named Georgia May Jagger, Jerry Hall and Mick Jagger's 17-year-old daughter, the face of her Spring 2010 campaign, as photographed by Mario Testino. She also refuses to take off her stilettos, except for at the gym.

The New York Times's Eric Wilson caught up with her when she was in New York, staying under the name "Mrs. Montez" in a suite at the Waldorf Towers.  When she first took over Versace, she says, “it was not easy to believe in myself or the future. Everyone was looking at me like a savior, and I had to have this image of this powerful strong woman, which I am not.”

"You have to face the truth" »

>> Versace Layoffs Coming to Help House Gain Back Profitability —Ever since former Versace CEO Giancarlo di Risio left the brand in June after clashing repeatedly with Donatella Versace, repositioning has been the order.  Versace announced earlier this month that it would close all stores in Japan, and now comes news that the brand will cut 350 jobs worldwide by the middle of next year after forecasting a loss in 2009 and a flat 2010.  The layoffs aim to help the house ensure profitability by 2011. [WWD]

>> Armani, Versace Supposedly Had Bidding War Over Megan Fox —  When Victoria Beckham declined to renew her Emporio Armani underwear ad contract earlier this month, rumors went around that Megan Fox was signed to replace her.  But now, Derek Blasberg reports: "Word on the casting couch is that [Fox] is taking over the [Armani] fragrance campaign for Beyonce, AND the fashion campaign also. This, after a Fox bidding war with none other than Versace." [Derek Blasberg Twitter, Derek Blasberg Twitter]

>> Versus, the young Versace line originally launched in 1989 and designed by Donatella Versace under her brother Gianni's supervision before it was discontinued in 2005, is being revived — no surprises here, considering that Donatella said in March of the line: "It was the first collection that my brother Gianni let me work on, on my own, so it's very precious to me."

She asked Christopher Kane to produce a capsule collection of crystal-studded Versus shoes and bags, which was rolled out in February, and for Spring 2010, the brand is on track for a full-fledged "dynamic presentation" of Versus ready-to-wear during Milan Fashion Week, according to a spokeswoman.

The line, which targets "Young Hollywood," or women between 20 and 30, is currently being sold in the new Versus showroom in Milan. “It’s very rock ’n’ roll and sexy,” Donatella Versace told WWD. “The collection reflects Versus’ DNA and is aimed at young people who want to dress with their own style but like to evolve and break new ground.”

>> Fashion Continues to Invade TV on the CW's Gossip Girl, The Beautiful Life —Zac Posen has staked out a position in the series premiere of the CW's model-centric drama The Beautiful Life and Nina Garcia just filmed for the show recently, but they're not the only familiar guest stars that are slated to appear: Matthew Williamson, Erin Fetherston, and Jessica Stam have all been booked and Versace and Calvin Klein are also somehow involved. As for Georgina Chapman and Tory Burch's mysterious Gossip Girl cameos, they begin in the upcoming season's first episode by hooking up with Blake Lively's character Serena, and according to the show's executive producer have to do with Serena's “decision [in terms of college] and what happens to her in the first couple of episodes.” [E! Online, People]

>> First Look: Atelier Versace Fall 2009 —Donatella Versace showed her Fall 2009 Atelier Versace couture collection by private appointment during couture week in July — and Style.com's Derek Blasberg reported of the line's latest edition: "[It's] all focused on the (super tiny) waist, handmade beadery. Really fancy that big blue one, a steal at 100k EUROS."  Last night, Diane Kruger wore a Fall 2009 Atelier Versace dress to the Los Angeles premiere of Inglourious Basterds, giving us a first glimpse of the collection; Versace's sketch of the dress is at Red Carpet Fashion Awards. [Red Carpet Fashion Awards]   

>> INSIDER WIRE —Over the weekend, Riccardo Tisci flew into Milan for the day to attend his first Versace menswear show, setting off questions as to what the trip might mean, especially just a week before his own menswear show in Paris.  He told the New York Times at Donatella Versace's private dinner at her palazzo that he came to demonstrate his support for the designer, who he compared to “the flag of Italy.” [NYTimes, Tommy Ton's Twitter]

>> INSIDER WIRE —Don't expect Gucci or Versace to go for a major resort runway production, a la Chanel. Frida Giannini admits: "Although I have shown the Cruise collection on the runway on a couple of special occasions in the past, I feel that these pre-collections for both men and women, which are ultimately more commercially driven, are more appropriately presented to buyers and press in the showroom."  And Donatella Versace agrees: "[Resort is] a commercial collection and having a full blown runway show can be confusing as it ruins the ‘commercialized’ moment." But Donatella is considering switching her runway shows up: “I’ve been thinking about doing a virtual runway show for over a year — we need to find a new formula.” [NYTimes]