House of Versace: The Untold Story of Genius, Murder, and Survival

by Deborah Ball

  “Of all the sexy things he made, what we used to sell were the suits,” said Ron Frasch, chief executive of Neiman Marcus at the time. “They were great fitting and very structured. You didn’t have to be a stick to wear them. It made a woman feel very strong.”27

  In the early 1990s, Santo pushed the Versace brand harder by adding a raft of new licenses for products that a bigger range of shoppers could afford, adding to the relatively small clutch of licenses he’d signed in the 1980s. For years, Gianni swore he would never design everyday items such as jeans or sportswear, but Santo gradually wore him down, pointing out how successful other brands, particularly Armani, had been with such products. It was a risky strategy, however, because licensees are always tempted to cut corners on the quality of the products in order to slash prices and sell more. Santo felt that, if he watched them carefully, licenses could boost Versace’s growth. So he signed contracts for everything from jeans and perfumes for children to bathing suits, underwear, umbrellas, plus-sized clothes, and home furnishings. In 1989, he created Versus, a less expensive, edgier line aimed at twenty-something shoppers, as well as Versace Jeans Couture.

  Santo’s strategy worked. Gianni’s image—fueled by his glitzy runway shows, his celebrity pals in South Beach, his spitfire sister—intrigued shoppers, who snapped up the more-affordable items. As a result, revenues from licensed products—led by the jeans—soon outstripped those of the house’s main lines. In 1991, before Santo’s most lucrative licensing deals, overall sales of Versace products were 770 billion lire (about $360 million), of which just less than half came from licensed products; most of the rest came from sales of the main men’s and women’s line.28 In just five years, the picture changed dramatically. Overall sales had nearly doubled, to 1.52 billion lire (about $800 million). Two-thirds of that came from licenses, with the rest from the house’s main lines.

  But from the beginning, the licenses and extra lines were a source of worry for Santo. Shoppers didn’t understand that some of the lines—such as Istante and Signatures, two toned-down variations on the main line—were produced by Versace. Some of the collections were too similar and would cannibalize one another’s sales. Others, such as the plus-sized collection, detracted from the luster of the Versace image. Santo’s salespeople pushed the franchisees hard to load up on licensed products, knowing that a percentage of sales flowed into the coffers of Via Gesù. But the franchisees often squawked, arguing that shoppers in their markets wouldn’t buy all the goods. Years later, managers of rival fashion brands would cite Versace as an example of a company that overplayed its licensing strategy.

  But in the 1990s, Santo pushed the licenses because he needed the extra money for a new business model that was gaining ground in fashion. It was the first rumblings of the luxury goods boom that would peak at the turn of the millennium, and the cornerstone of the new approach was fully owned boutiques. Around 1990, Louis Vuitton and Prada began spurning franchise contracts and instead started to open shops themselves. A franchise approach suits a company when it’s just starting out, by sharing the burden and expense of opening new stores with boutique owners willing to take a risk on a new brand. However, when a brand begins to grow quickly, the franchisees pocket most of the gains. Santo saw that Versace could make far more money if it chucked the franchisees and opened more of its own shops.

  The strategy of shunning the franchisees, however, cost a fortune. Prada, Vuitton, and later, Gucci were opening opulent stores that cost millions of dollars each. The booming economy sent rents on streets such as Fifth Avenue in New York and Bond Street in London soaring. The core of the model was the huge flagship store, complete with VIP rooms and ornate furnishings that were showcases for a house’s full collection. The flagships often lost money, but their owners hardly cared. They were valuable marketing vehicles, rather than simple sales outlets. When a Japanese shopper came to Paris to buy a coveted Louis Vuitton bag at the boutique on the Avenue des Champs-Élysées, she wanted a dazzling experience. But the approach was very risky: When sales fell, the fixed costs of the shop—huge rents, large amounts of stock, and trained sales staff—were impossible to cut, throwing the stores quickly into the red.

  In the early 1990s, when Gianni’s collections were hot, the risks seemed slim to Santo, and he began buying back franchises. In turn, Gianni threw himself into planning a series of stunningly opulent flagships, designed by the best architects and with the highest quality materials. While other brands saved money by choosing a single image for all its shops and negotiating volume discounts for the renovations, Gianni treated the shops like his personal playthings, designing a different look for each big new boutique.

  In 1991, Versace opened a twelve-thousand-square-foot store—his third in Paris—on the Rue du Faubourg Saint-Honoré complete with a large VIP room for couture clients. In Milan, the company opened a second shop on Via Montenapoleone, a three-story boutique with marble and mosaic floors, pillars, and trompe l’oeil paintings on the moldings of the arches. But the performance of the new shop was an ominous sign for the future: Sales of the two Via Montenapoleone stores remained the same. Adding a new shop had doubled costs but only cannibalized sales from the original boutique. Within just a few years, Santo’s ambitious expansion strategy would come back to haunt him.

  As Versace’s growth soared, Gianni kept up a frenetic pace, fearful perhaps of letting the fruits of his extraordinary success slip through his fingers. He worked constantly, during vacations, holidays, and even during family events such as Allegra’s baptism. By then, Via Gesù was the casa-bottega (house-and-shop) he’d always dreamed of, the atelier an extension of his own home. While his private apartments were richly furnished, the atelier on the upper floor was almost plain, workaday. Two cream-colored salons with floor-to-ceiling mirrors had plenty of space to hold fittings, receive suppliers, and lay out photos for ad campaigns. Along the corridors were shelves and shelves of books. He owned about twenty thousand volumes that served as inspiration for his collections, and he hired a librarian to manage them all.

  As the company grew, his days became marathons, and at times he resented the unforgiving pace. “Are you trying to kill me?” he roared when he saw how many meetings his secretaries jammed into his schedule. The first one to arrive in the atelier in the morning, he left around 6:30 p.m. each evening, only to return many nights around 9, clad in one of his silk dressing gowns, to work as late as 3 a.m.

  He was unstintingly generous with employees who met his high expectations. He bought a block of apartments in a building in the center of Milan so that his favorite associates could live rent-free. He adored a middle-aged couple, Lucia and Giovanni, who were his personal valets. When he learned that Giovanni, as a young man, hadn’t been able to afford an engagement ring for Lucia, Gianni immediately sent an assistant down to his favorite jeweler to buy her one.

  But in spite of his kindness, Gianni could also be a tyrant. If he felt disappointed with an employee’s work, he seemed to take it personally, refusing to speak with that person for months at a time. He sometimes emerged from a meeting room after an argument with a supplier with his face red with rage and his hair flying around his head like Beethoven’s. He engaged in a bitter war with the close friend who had bought half of Villa Fontanelle when Gianni himself hadn’t had the money to buy it all. After a series of arguments over the renovation of the estate, Gianni turned petty and mean, cutting the electricity off in the friend’s half of the property and even tossing her lounge chair into the lake in a fit of pique. His posturing could veer into prevarication and vanity. He blithely fed journalists lies that puffed up his image, claiming to have met Picasso when he was twenty-two (an age when he was still living in Calabria) and to have discovered the medusa logo in an ancient mosaic tile floor near his family home in Reggio, not on a door handle of Via Gesù.

  In order to escape the pressure of the atelier, he and Antonio left for Villa Fontanelle every Thursday evening. Every Friday and Saturday, he had his
silk suppliers bring him samples of his prints, and he happily pored over the color swaths laid out on large tables in the main salon. He brought guests to a restaurant on Isola Comacina, a tiny island, and took them for a tour of the lake afterward in his small boat. He and Antonio went for tea at nearby Villa D’Este, a five-star hotel with a plush gym where Antonio worked out every evening. Sometimes, Gianni joined his celebrity guests such as Sylvester Stallone or Madonna for a desultory session at the gym, but otherwise he mostly soaked in the sauna.

  As he became more famous, he shunned the limelight. He had never liked appearing even in his own publicity photos, and he started wearing dark sunglasses more often. He and Antonio ate dinner mostly at home because he hated being stared at in restaurants. Once, he took Allegra to the opera in Miami, but left halfway through because so many people approached him for an autograph. He generally let his sister tend to the celebrities, his tastes running more toward art and theater. According to Ingrid Sischy, then editor of Interview Magazine and a close friend of Gianni’s, at a dinner in New York, he once sat next to Madonna, Elton John, and the rapper Tupac Shakur, “but the person he left with at two a.m. was Philip Taaffe”—the prominent New York artist—“because he wanted to go to the studio. He wasn’t running off with Madonna to a late-night cabaret. He had a lot of options that night. But what he wanted to do was look at this artist’s studio.”29

  twelve

  Conflict

  iN AUGUST 1994, AFTER RETURNING FROM A TRIP TO THE United States, Gianni noticed his hearing in one ear had suddenly worsened. At first he thought it was a simple infection, but then his ear and his whole right cheek began to swell alarmingly. He began losing weight and grew worried. After a battery of tests, a doctor in Milan gave him the grim news: Gianni had a rare type of cancer of the inner ear, which had affected a nerve and caused the swelling. The doctor ruled out surgery because of the risk that touching the nerve could disfigure Gianni’s face. Instead, he would have to undergo chemotherapy. Gianni was shocked. At forty-seven, he had long suffered from a type of anemia, which fatigued him at times. But otherwise, he had enjoyed excellent health.

  The cancer diagnosis hit Gianni just when his company had grown too big for him to manage as he had done for years—designing every line, checking every sample, deciding every advertising image. His days were so busy that in the evening his employees started giving his private valet briefcases of documents or photos he needed to review. Early the next morning, he would return the case with detailed comments or orders, having worked late into the night.

  For more than a year, between August 1994 and October 1995, a nurse came regularly to Gianni’s private apartments in Via Gesù to administer the chemotherapy. It was a relatively mild dose, sparing him the anguish of nausea and hair loss. However, the treatments left him feeling exhausted and frustrated, unable to sustain his normal frenetic pace. Rumors began to fly that Gianni was suffering from AIDS (despite his active sexual history, the regular blood tests required by his anemia had always showed him to be free of the virus). In the atelier, he never spoke of his cancer, but his face was drawn and tired, drained of color.

  Gianni’s illness brought to a head tensions with Donatella that had been building for several years. He went to bed earlier and sometimes had to nap after lunch to recover his energy. Often feeling tired and sick, he had little choice but to leave more and more responsibility to his sister. In turn, Donatella, nearing forty and beginning to chafe at the role of mascot and kid sister, was keen to emerge from Gianni’s long shadow. According to friends, she felt that her big brothers too often dismissed her as a lightweight, treating her as the junior partner in the company.

  As Gianni cut back his public appearances, Donatella soaked up the limelight. She presided at dinners and parties and courted more publicity. In years past, Donatella hadn’t been a natural with the press, often seeming as nervous as an understudy with journalists. But with Gianni temporarily indisposed, Donatella triumphantly took center stage. Her outré look and prodigal lifestyle—her drug use was, by now, fashion’s worst-kept secret—piqued press interest, and she, in turn, developed a candid, witty style that charmed journalists. She happily submitted to a slate of new requests for profiles. In June 1997, Vanity Fair ran a fawning ten-page spread entitled “La Bella Donatella,” including a photo of her, nude except for a diamond Gianni had given her, in a Plexiglas egg rising from the waves. It was a masterpiece of lighting, makeup, and retouching that succeeded in making her, if not beautiful, then extremely alluring. In another shot, Donatella sits at the breakfast table in a full-length evening gown, Daniel perched on her lap, with Allegra sitting next to her. A Wheaties box sits on the table, a cheeky prop in a family tableau that was otherwise anything but traditional.1

  Her already fast-paced life rose another notch around then. One night in early 1997, after wrapping up a fashion shoot in Manhattan, Donatella asked a few members of its cast to join her for a night out—in high Versace style. A chauffeur-driven car shuttled them out to Teterboro Airport, an airstrip just outside Manhattan in New Jersey, where a private jet was idling. The group settled into their seats, and the luxury plane took off for the two-and-a-half-hour flight to Minneapolis. After the plane landed in the freezing city around 10 p.m., a car whisked Donatella’s posse to the city’s top five-star hotel, where a closetful of Versace party clothes hung in its best suite. Hair and makeup people were there to doll everyone up. The destination: a private concert by Prince at the pop star’s palatial home. Donatella was a huge fan of Prince, inviting him often to the Versace house in Como. Gianni found the singer odd. “I saw very little of him,” he told a journalist later. “I was quite shocked by the fact that he noticed the house was on a lake only after he’d been there for three days. He lives in the dark.”2

  To the consternation of the Versace entourage, when they arrived at Paisley Palace, Prince showed them the empty crib of his baby son, who had died of severe birth defects in the fall of 1996, a week after his birth. After mixing with other guests for a couple of hours, Prince finally climbed onstage for a dazzling two-hour concert. Afterward, Donatella, flushed from dancing, brought the group backstage, where they hung out with the diminutive pop star and his wife. After partying much of the night, they were ferried by car back to the airport, where the private jet waited to fly them back to New York. Donatella returned to her hotel suite around dawn.

  “That’s how Donatella rolled back then,” said one participant in that evening’s festivities. “It wasn’t that she was a hanger-on. It wasn’t like Armani or Gianni, who weren’t really interested in that life. She was living a rock star’s life. She was full on.”

  Since Gianni first beckoned Donatella to Milan in 1978, he had pushed her to do more, encouraging her to assume greater responsibility at the company and extolling her talent both in the atelier and in the press. But when he fell ill, things shifted. A man of prodigious energy, he was enormously frustrated at being ill, and it changed him. The pace of the past two decades had given him scant chance to reflect on his own mortality, absorbed as he was in his extraordinary success. Now, approaching his fiftieth birthday and facing the possibility of an early death, he began to ruminate on his family and the future of his label. He was feeling increasingly shunted aside by his siblings and was fearful that he would lose control of the atelier just as the company was soaring. While he signed off on press releases referring to Donatella as “codesigner” at Versace, privately he fumed at her showboating. He began to see her not as a kid sister but as a rival.

  Since 1989, Gianni had let Donatella design Versus, the company’s younger, edgier line. Donatella’s role in Versus was nothing like that of Gianni’s with the top line; she relied heavily on the talents of her design team, and the financial pressure on her was low, given that Versus made up little more than 3 percent of Versace’s sales. But now the line became an increasing source of discord between the siblings. Donatella held some Versus shows in New York, partly to escape th
e full force of Gianni’s scrutiny. She put off the moment that she showed Gianni the collection as much as possible, so that he couldn’t interfere. Indeed, when Gianni checked his sister’s work in the days before the runway show, he often didn’t like it.

  Changes in the fashion business only worsened the conflict between them. Just as Gianni fell ill, a shift was occurring, one that boded ill for the more-is-more vision that Versace championed so heartily. A new trend of spare, minimalist clothes was red hot, pushed principally by Miuccia Prada, a Milanese designer who had inherited her family’s company, a blue-blood manufacturer of fine luggage. Prada shot to fame in the late 1980s when she used black nylon fabric to make small backpacks, a high-tech look that was an antidote to the decade’s baroque fashions. The backpacks struck a chord with followers of so-called dog-whistle fashion, or items that were so high-concept that only an elect few got the message.

  “The groovy people came into our Seventeenth Street store and inhaled those backpacks,” recalled Simon Doonan, executive vice president of Barneys New York.3