The rise and fall of Versace: Can Prada's £1 billion buyout save Donatella's legacy?

Daily Mail​

17-05-2025

I first met Donatella Versace 19 years ago, but still clearly remember it. The platinum-coiffed queen of bling finished her Italian breakfast – a Marlboro Red and a double espresso – and wiggled through the glass doors leading to her design studio in Milan. She began pinning a navy blue A-line dress on a model and talked and talked and smoked and smoked. She explained her style aesthetic: bleached blonde hair, Bikini Atoll tan, the darkest eye make-up on the planet and dresses cut up to 'here' (indicating the top of her thighs), and down to 'there' (making a plunging V on her chest). 'I don't like natural,' she told me. 'For me, natural has something to do with vegetables.'
How we loved her and her brother Gianni. They were the king and queen of 1980s splash 'n' spend luxe. They invented celebrity culture, once persuading the world's top four supermodels of the time – Linda Evangelista, Cindy Crawford, Naomi Campbell and Christy Turlington – to walk the runway together to George Michael 's 'Freedom'. They created two of the most famous dresses ever made – Elizabeth Hurley 's safety-pin gown and Jennifer Lopez 's barely there jungle-print number – sanctioning outward displays of self-assured feminine sexuality.
Gianni's acid yellow and gold baroque fantasy home on South Beach did more than Don Johnson to put Miami on the global style circuit and Versace was the first label to move on from styling clothes to styling suites. In 2000 the fashion house opened its inaugural opulent hotel on Australia's Gold Coast, south of Brisbane. I checked in shortly afterwards and it is the only hotel I have left, got to the end of the driveway and turned round and checked back in again. How could I resist one more night in Elton John heaven?
Gianni was murdered in 1997 and now, after almost 30 years carrying the Medusa-head torch for excess, Donatella has left the palazzo. Last month Prada Group revealed it had bought Versace for £1 billion after its US owner, Capri Holdings, failed to reverse a dip in sales and profits as low as a Versace neckline. Under Capri, Versace's annual sales slumped to a meagre £600 million last year, compared with £6.5 billion for Gucci. 'Commercially, Versace is all but dead,' said Jonathan Siboni, chief executive of Paris-based research analyst Luxurynsight, when the deal was announced. Donatella, now 71, will stay on in an ambassadorial role. Following the news, she told her 12.5 million Instagram followers: 'It has been the greatest honour of my life to carry on my brother Gianni's legacy.'
Prada could scarcely be more different from Versace. Miuccia Prada, founder of the label as we know it, is a former communist whose collections are avant garde and come mainly in her favourite colour: grey. But might, just might, opposites attract? Could Prada bring Versace back from the brink?
One man who should know the answer is the chief executive who worked with Donatella when the label last turned a healthy profit. Jonathan Akeroyd, Versace's CEO from 2016 to 2022, is 'very excited' by what Prada will do. 'Versace has incredible brand equity. A lot of people can instantly identify Versace, while they wouldn't be able to identify Valentino, Fendi or Ferragamo,' Akeroyd says. He adds that its Milan atelier 'is one of the best in the world' and the brand boasts big fragrance, underwear, homeware and fashion jewellery businesses.
Prada is the right owner, he says. It is an Italian family business, 'which matters to a quintessentially Italian family brand like Versace'. It also has cash to invest. Prada Group is listed in Hong Kong, with a market capitalisation of nearly £12 billion. Since the pandemic, sales have continued to grow despite a downturn in the luxury market. Revenues rose 17 per cent to £4.6 billion last year.
Prada 'has an incredible awareness of product, merchandising and marketing and it executes it as well as the mighty Louis Vuitton', says Akeroyd. Its expertise in Italian manufacturing, notably shoes and bags, will be a great asset. Versace lacks an It-bag or shoe line, which is odd for a brand that, until the Prada deal, was run by a woman who is so fond of stilettos she once said: 'I never wear flats. Every time I wear them I fall over.' A make-up line could be another growth segment.
Fashion analysts say the key to success will be 'persuading people to think about visiting a Versace boutique after years when it has not been on their shopping list', as Luca Solca at Bernstein puts it. After decades of 'doing the same old thing and losing relevance', Versace 'needs to interpret the Versace code in a modern way that creates buzz'. Solca suggests Prada should take a leaf out of the playbook of Pierpaolo Piccioli and Maria Grazia Chiuri, the creative directors who were hired to revive Valentino. 'They introduced the metal Rockstuds, which instantly made the brand's shoes and bags desirable.'
Much rests on the youthful shoulders of Dario Vitale, 41, Versace's new creative director. He helped to create the wildly successful rebel college girl look at Prada's little sister brand Miu Miu. Can lightning strike twice?
Fashion and luxury industry adviser Achim Berg sees advantages in Prada's 'growing property portfolio'. Versace's 230 boutiques and 600 other points of sale in department stores and outlet stores are, he argues, too much for a brand with a relatively small turnover. He recommends swapping a few Versace boutiques for Miu Miu. Versace and Prada executives will be swapping places, too, he predicts. 'Renewal will happen on the management and creative side.'
Hospitality analysts hope Versace expands its hotel operations beyond Dubai, now its sole venue after the Australian property was sold in 2023 (it had become tired). Better operators could help; perhaps Four Seasons which is on a roll now thanks to its association with the hit TV show The White Lotus. Put it all together and Berg reckons that Versace could generate over £2 billion in annual sales.
What of Donatella herself? Those who are close to Prada say that she may have a role in the celebrity side of the business. They point out that she has 'a good eye and has consistently chosen the right supermodels, actors and musicians for Versace', as one puts it – one of the latest being Lady Gaga. She could be key in persuading new stars to front 'fresh and young' advertising campaigns that connect with a generation that doesn't remember the 80s glory days. But Donatella won't be back in the Milan studio. As someone well acquainted with her puts it, 'Prada knows that if they let her in, she wouldn't be able to stop herself getting involved in design because she loves it so much. She'd be in the office all the time and it would be a distraction.'
In that case, I should give the last word to Donatella because what she told me 19 years ago seems appropriate today. The queen of glitz said she wanted to re-establish Versace as 'the ultimate Italian luxury lifestyle brand' with clothes, accessories, jewellery, homeware, hotels and travel goods. 'A unique 360-degree lifestyle, 365 days a year – an Italian dream,' she said.
Over to you, Miuccia Prada. Dream big.