Arrivederci, Donatella Versace

Summary

The Journal Podcast Summary: "Arrivederci, Donatella Versace"

Episode Release Date: March 25, 2025
Hosts: Kate Linebaugh, Ryan Knutson, with Jessica Mendoza
Produced by: The Wall Street Journal & Gimlet, in collaboration with Spotify

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Introduction

In the March 25, 2025 episode of The Journal, hosts Kate Linebaugh and Ryan Knutson delve into the significant transition within the iconic Italian fashion house, Versace. Titled "Arrivederci, Donatella Versace," the episode explores Donatella Versace's departure from her long-standing role as the brand's creative director, marking the end of an era for the global luxury brand.

Background: Versace's Legacy

Versace, established in Milan by Gianni Versace in 1978, has been synonymous with bold, dramatic fashion characterized by vibrant prints, luxurious fabrics, and flamboyant designs. Donatella Versace, Gianni's sister, became the creative force behind the brand following Gianni's tragic murder in 1997. Under her leadership, Versace solidified its reputation, crafting iconic looks for celebrities like Madonna, Lady Gaga, and Beyoncé.

Suzanne Kapner, WSJ Fashion Industry Correspondent, highlights:
"Donatella is incredibly central to the Versace brand. She's very recognizable for her platinum blonde hair and her dark eyeliner... you would know her almost as a celebrity."
(06:23)

Acquisition by John Idol and Capri Holdings

In 2018, facing stiff competition from conglomerates like LVMH and Kering, Versace was acquired by John Idol's company, Capri Holdings, for over $2 billion. Idol, known for transforming Michael Kors into a multi-billion dollar entity by democratizing the brand and expanding its market reach, envisioned a similar trajectory for Versace.

John Idol explains:
"Michael Kors is trying to fire up sales by tacking on big name brands like the globally revered Versace."
(10:19)

Initially, Versace executives welcomed the acquisition, anticipating increased resources for expansion and innovation. However, underlying tensions soon emerged between the American business strategies of Capri and the Italian creative ethos of Versace.

Creative Clashes and Strategic Differences

The core of the conflict lay in differing visions for the brand's future. Idol aimed to streamline Versace's offerings, favoring more understated, elegant designs akin to brands like Dior. This approach contrasted sharply with Donatella's penchant for the brand's signature boldness and extravagance.

Suzanne Kapner notes:
"He wanted to make it less Versace more Palm Beach, less South Beach, so to speak. Tone down those bright colors, get rid of those bright prints, make it more like Dior."
(14:57)

Donatella, committed to maintaining Versace's distinctive flair, found herself at odds with Idol's business-driven interventions. Instances such as Idol directing the removal of flamboyant men's silk shorts from store displays exemplified the growing discord.

Kate Linebaugh summarizes:
"Donatella was not pleased, especially because her idea of partnering with John was that he was going to bring his business chops to the partnership, not weigh in on all the creative stuff."
(15:26)

Impact on Versace's Performance

The misalignment between Capri's strategic objectives and Versace's creative direction began to reflect in the brand's performance. The luxury fashion market experienced shifts post-pandemic, with a noticeable decline in sales and a surge in the "quiet luxury" trend—favoring subtle, logo-less designs over flashy attire.

Suzanne Kapner explains:
"Coming out of COVID, two things happened. One, the quiet luxury trend became very popular... And then secondly, luxury industry started to go into a bit of a slump."
(14:02)

Versace's sales plummeted by approximately 20% in the first nine months of the fiscal year, and Capri's stock, since acquiring Versace, had fallen by about 40%. Attempts to merge Capri with Tapestry were blocked by regulators, leaving Idol in pursuit of alternative strategies to revitalize the brand.

Donatella Versace's Departure

Amidst declining sales and escalating creative tensions, Donatella Versace announced her resignation as creative director, effective April 1. Her departure was a culmination of long-standing frustrations over creative autonomy and the direction imposed by Capri's management.

Donatella Versace stated at a Vogue event:
"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."
(18:35)

Her exit signifies a profound shift for Versace, as she had been the creative cornerstone of the brand for nearly three decades. Dario Vitale, former design and image director at Miu Miu, will succeed her, signaling a new chapter for Versace without its founding family's direct creative input.

Suzanne Kapner observes:
"Now we are really going to enter a new era for Versace where there is no Versace at the helm."
(18:23)

Future of Versace Under New Leadership

With Idol expressing confidence in his vision for Versace, the brand is poised to undergo a transformation towards more understated luxury. The introduction of a new baroque "V" insignia on handbags indicates a strategic shift, although public reception has been mixed, reflecting ongoing brand identity confusion.

John Idol asserts:
"We recognize that brand evolutions take time and that challenges are inevitable along the path to success."
(19:08)

Suzanne Kapner predicts that Versace will continue to elevate its focus on craftsmanship and elegant designs, moving away from the flamboyant aesthetics that once defined it. However, this shift may alienate long-time enthusiasts while attempting to attract a new, perhaps more subdued clientele.

Conclusion

The departure of Donatella Versace marks a pivotal moment for the brand, symbolizing the complex interplay between creative vision and corporate strategy within the luxury fashion industry. As Versace navigates its post-Donatella era under Capri Holdings' leadership, the fashion world watches to see whether the brand can successfully reinvent itself while retaining its storied legacy.

Ryan Knutson concludes:
"So it sounds like she might have felt a little bit like her hands were tied creatively."
(18:52)

This episode of The Journal offers an insightful exploration of the challenges faced by family-run luxury brands in the modern corporate landscape, highlighting the delicate balance between maintaining brand identity and adapting to evolving market demands.

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Notable Quotes:

• Donatella Versace:
  "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."
  (18:35)

• John Idol:
  "Michael Kors is trying to fire up sales by tacking on big name brands like the globally revered Versace."
  (10:19)

• Suzanne Kapner:
  "Donatella is incredibly central to the Versace brand... you would know her almost as a celebrity."
  (06:23)

---

References:

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Transcript

[Ryan Knudsen]

Hey, Kate.

[Kate]

What's up, Ryan?

[Ryan Knudsen]

Thanks for popping in the studio.

[Kate]

My absolute pleasure.

[Ryan Knudsen]

I understand that you have something that you want to share with our listeners.

[Kate]

I do. It's kind of a big thing. After six years on the show, I am taking a new job and will be leaving our podcast. I'm going to be the Wall Street Journal's new corporate news editor.

[Ryan Knudsen]

Congratulations.

[Kate]

Thank you.

[Ryan Knudsen]

How does it feel?

[Kate]

All the feels, Ryan. I've got all the feels because working on this podcast with you and all of our producers and editors and engineers has been the best. And bringing the news every day, telling our listeners about the money, business, and power stories has been so much fun. And I'm going to miss doing this with you and especially connecting with our listeners every day.

[Ryan Knudsen]

It's been so much fun to work with you, Kate, over the last six years on this show. And I know that I can speak on behalf of everybody when I say we are going to miss you a lot. I don't know who's going to miss you more, me or our listeners.

[Kate]

Well, I mean, you still get to hang out with me.

[Ryan Knudsen]

Yeah, it's going to be the listeners because I'm going to be in your office every day.

[Kate]

And I also promise to bring you a steady stream of stories about money, business, and power.

[Ryan Knudsen]

Please do.

[Kate]

And don't worry, because I'm sticking around for a few more weeks, but my time with the show will officially conclude at the end of April.

[Ryan Knudsen]

Well, I'm glad that we have you for a few more weeks, and I want our listeners to know that the show's not changing. Co host Jessica Mendoza and I will still be here telling the most important money, business, and power stories out there.

[Kate]

And I'll be listening.

[Ryan Knudsen]

Aw.

[Kate]

Aw.

[Ryan Knudsen]

Well, thank you, Kate. It's been a pleasure.

[Kate]

Thank you, Ryan.

[Ryan Knudsen]

All right, now onto today's episode, which is, fittingly about another icon handing off something that she helped build. Here it is. The high end Italian fashion brand Versace is known for its dramatic clothing.

[Suzanne Kapner]

It's lots of bold colors, vibrant prints, outrageously sexy designs.

[Ryan Knudsen]

That's our colleague Suzanne Kapner who covers the fashion industry, and she says people on the Internet still talk about some of Versace's most famous looks.

[Suzanne Kapner]

If you remember that safety pin dress that Elizabeth Hurley wore back in the.

[Ryan Knudsen]

90S, I can't say that I do personally.

[Suzanne Kapner]

The black evening gown was made from silk and lycra, strategically held together with oversized novelty gold safety pins.

[John Idol]

Photographs of the dress were seen in all of the international press.

[Suzanne Kapner]

It's been in the Metropolitan Museum, it's.

[Ryan Knudsen]

Been worn by Lady Gaga.

[Suzanne Kapner]

That dress kind of, you know, was a moment for a lot of us.

[Ryan Knudsen]

The only piece of Versace that I think that I know or remember is the JLO dress. That green one with, like, the plunging neckline.

[Suzanne Kapner]

That one jungle dress. Yes.

[John Idol]

When you think of iconic outfits Worn in the 2000s, this Versace dress worn by Jennifer Lopez always makes the list. It was cut up to here and.

[Suzanne Kapner]

Cut down to there with just like a jeweled panty underneath. Honestly, when I think of JLo, I.

[Ryan Knudsen]

Think of this dress. Yeah, I think I was in seventh grade when she wore that dress.

[Suzanne Kapner]

Yeah, that was in 2000. You're a baby.

[Ryan Knudsen]

But the era of such bold Versace designs might be over. Recently, the fashion house made a big announcement. Donatella Versace, who'd been the creative mind behind her family's brand for nearly three decades, is stepping down as creative director. The news followed growing tensions between her and the brand's American corporate owner.

[Suzanne Kapner]

It's really this culture clash. One between the Americans and the Italians, and then two between the corporate suits and sort of the creat.

[Ryan Knudsen]

And now, with Donatella stepping aside, Suzanne says Versace is at a turning point.

[Suzanne Kapner]

You know, the house had been under creative control by Versace since it was founded by her older brother Gianni in 1978. So Versace going forward is going to look different than Versace of the past.

[Ryan Knudsen]

Welcome to the Journal, our show about money, business and power. I'm ryan Knudsen. It's March 25th. Coming up on the show, the end of the Versace era at Versace.

[John Idol]

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[Ryan Knudsen]

Donatella Versace has been part of the brand's identity since it was founded in Milan by her older brother, gianni Versace, almost 50 years ago. How central is Donatella Versace to this Versace brand?

[Suzanne Kapner]

Well, I mean, she is the Versace brand. She's incredibly central. She's very recognizable for her platinum blonde hair and her dark eyeliner. You know, you would know her almost as a celebrity, almost as one of Versace's celebrity clients. That's how recognizable she is.

[Ryan Knudsen]

Donatella's celebrity status was integral to the brand's early growth. She made important relationships with fashion editors and celebrities to help build the brand's profile.

[Suzanne Kapner]

But it wasn't until gianni's murder in 1997 that she was sort of thrust into, you know, the crucial key role of Chief Creative Officer.

[Donatella Versace]

July 15. The fashion world is rocked by the murder in Miami beach of Italian designer Gianni Versace.

[Ryan Knudsen]

After Giovanni's death, Donatella took his place as creative leader of Versace. In that role, she went on to create some of the brand's most iconic looks and ad campaigns featuring stars like Madonna, Lady Gaga and Beyonce.

[Suzanne Kapner]

And, you know, from everybody I talk to, people have the nicest things to say about her, that she is just, you know, a sweetheart and professional. And, you know, she's sort of mild mannered. She's not like the screaming diva type. You know, people who've worked for her just really sing her praises.

[Ryan Knudsen]

But by the early 2000s, Versace, the business was having a hard time. It was struggling to compete against bigger brands like LVMH and Kering, which were starting to acquire family run fashion houses like Christian Dior, Yves Saint Laurent and Gucci.

[Suzanne Kapner]

So Versace was like one of the last remaining independent players. And it was really dwarfed by these giants that had formed around it. And the family Versace family had to sell some Picasso paintings, some leases on its stores. They sold Gianni's Miami mansion to kind of help plug operating losses. So, you know, they struggled for a while.

[Ryan Knudsen]

Despite its troubles, Versace wasn't really looking to sell. But then Donatella Versace met John Idle.

[Suzanne Kapner]

John is a businessman who has been very successful. He is very smooth. If you see pictures of him, you know, he looks like a CEO out of Central casting, you know, very buttoned up in his suit. And he started his career at Ralph Lauren and then he became CEO of Donna Karan in 1997 and went on in 2003 to join with some investors to buy the Michael Kors brand. And he, along with the designer Michael Kors, really grew that into a. Just a powerhouse of a brand.

[Ryan Knudsen]

How did he do that?

[Suzanne Kapner]

The way he grew Michael Kors was he really sort of democratized the brand and made it more affordable to younger, less affluent customers. He opened outlet stores. He introduced kind of lower price products that were sort of entry level for the brand to sort of attract that younger customer. And that's how he sort of broadened its appeal and turned it into a large business.

[Ryan Knudsen]

With Michael Kors, Idol had bought a small business and turned it into a global, multi billion dollar company. And in 2018, he tried to persuade Donatella that he could do the same for Versace.

[Suzanne Kapner]

Donatella met John for dinner in Milan. And after that conversation, she said she was convinced that John could really bring some business acumen to help grow the business, particularly its online sales and to help open stores. And she agreed to sell the company to what was then called Michael Kors.

[John Idol]

Michael Kors, like others in the fashion industry, is trying to fire up sales by tacking on big name brands like the globally revered Versace, where vinyl skinny jeans sell for $12,500.

[Ryan Knudsen]

Michael Kors bought Versace for just over $2 billion. Idol took over the business side of things, and Donatella stayed on as the brand's creative director. After the sale, Idol changed the name of his company from Michael Kors to Capri, named after an island off the Italian coast.

[Suzanne Kapner]

Initially, the Versace executives I spoke with were happy and excited that they had this new parent to bankroll, you know, an expansion that they were going to be able to roll out new product categories, open new stores, really build the business. They would have the resources to do things they hadn't been able to do before.

[Ryan Knudsen]

But not long after the acquisition, a seam started to tear in the relationship. An early warning sign was that the American executives and Italian designers had a hard time even talking to each other.

[Suzanne Kapner]

You know, the American executives would come into design meetings. You know, the designers would be trying to explain their inspiration for the latest collection. And the Americans would say, like, what are the key performance indicators? And the designers would be like, I don't. We don't know what you're talking about. You know, it's just they weren't speaking the same language.

[Ryan Knudsen]

They're using some business terms. Your KPIs, right.

[Suzanne Kapner]

American businessmen love those, you know, those jargony terms.

[Ryan Knudsen]

We sure do.

[Suzanne Kapner]

To grow a true luxury brand, you know, takes decades, not quarters. And people say, well, Americans, they Look at the next financial quarter. Europeans, look, they're thinking along about generations. You know, they just take a much longer term view of things.

[Ryan Knudsen]

And then Idol and Donatella started butting heads on the brand's creative vision. That's next.

[Donatella Versace]

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[Ryan Knudsen]

After the pandemic, the luxury fashion market started to change.

[Suzanne Kapner]

Coming out of COVID two things happened. One, this so called quiet luxury trend became very popular. And this was like understated, no logos, you know, very kind of sleek, minimal design, minimalistic designs, the highest quality materials, but very sort of understated. And then secondly, luxury industry started to go into a bit of a slump. You know, people, they had stocked up on a lot of luxury goods during the pandemic. They started spending on other things like travel and entertainment. And luxury sales started falling at a lot of brands.

[Ryan Knudsen]

One estimate shows that between 2022 and 2024, the number of luxury goods sold globally collapsed by more than a fifth. At Versace, the pressure was on and John Idle stepped in and started weighing in on designs. What was Idol's vision for Versace?

[Suzanne Kapner]

Here's where the clash starts to kind of develop. He wanted to make it less Versace more Palm beach, less south beach, so to speak. Tone down those bright colors, get rid of those bright prints, make it more like Dior. You know, little black dresses, elegant and sophisticated, not, you know, as flashy as it had been.

[Ryan Knudsen]

How did Donatella Versace respond to these ideas?

[Suzanne Kapner]

Well, you know, it's like, you know, calling your baby ugly, right? It's like, you know, I think she was not pleased, especially because, you know, her idea of partnering with John was that he was going to bring his business chops to the partnership, not weigh in on all the creative stuff. I mean, he was not trained as a designer. He does not have a background in design yet. He would go to design meetings and he would give lots of feedback.

[Ryan Knudsen]

In one instance, Idol had men's silk shorts removed from mannequins and Versace store windows because he thought they were too flamboyant. Why? Why did he want to get involved in the sort of creative side if you had sort of pitched the deal as business?

[Suzanne Kapner]

My sense is, you know, he had a sense of what would sell. And he would go into design meetings and he'd say, this is not going to sell. And sometimes he was right and sometimes he was wrong.

[Ryan Knudsen]

Idol also wanted Versace to add a new insignia similar to Michael Kors MK or Louis Vuitton's lv. So the design team came up with a baroque V that Versace then started putting on handbags.

[Suzanne Kapner]

I think Donatella tried to deliver what he wanted, and then if it didn't work, she would revert back to more traditional Versace designs. And if you look at Runway shows, you can see this fluctuation. You know, one season it's a lot of black and browns, and the next season it's all the bright colors again. And then, you know, it's back to the blacks and the more muted designs. So, you know, this was like a brand kind of going through this transformation that created a lot of confusion about what Versace stood for.

[Ryan Knudsen]

What did all this flip flopping mean for Versace's sales?

[Suzanne Kapner]

Well, they turned off a lot of their core customers and they didn't attract enough new ones. So, you know, the changes are not showing up favorably in the numbers. In the first nine months of the fiscal year, the sales are down something like 20%.

[Ryan Knudsen]

The company's stock is down, too. Since Capri acquired Versace in 2018, its stock has fallen about 40%. So Idol is now looking for another merger. He tried combining Capri with the fashion house Tapestry, but that deal got blocked by regulators. Now Suzanne says he's been having talks about possibly selling Versace to Prada. And then a few weeks ago came the big announcement.

[Donatella Versace]

Donatella Versace, who has been at the helm of Versace for more than 25 years, is stepping down.

[Suzanne Kapner]

Dario Vitale, former design and image director at Miu Miu, will take on Donatella's role from April 1.

[John Idol]

She says, in my new role as chief brand ambassador, I will remain Versace's most passionate supporter. Versace is in my DNA and always in my heart.

[Suzanne Kapner]

So now we are really going to enter a new era for Versace where there is no Versace at the helm.

[Ryan Knudsen]

What did Donatella Versace say about why she decided to leave?

[Suzanne Kapner]

So the day before her last fashion show in Milan, Donatella spoke at a Vogue event. And I thought what she said was very telling. She 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.

[Ryan Knudsen]

So it sounds like she might have felt a little bit like her hands were tied creatively.

[Suzanne Kapner]

Yeah, I think she was being given a lot of direction by the managers of what to do. But she really, you know, has been the creative vision behind Versace now for the past, you know, almost three decades.

[Ryan Knudsen]

After Donatella stepped down, Idol told the Wall Street Journal that he's confident in the vision he'd set for Versace. He said, quote, we recognize that brand evolutions take time and that challenges are inevitable along the path to success. I guess it's the end of an era for Donatella Versace.

[Suzanne Kapner]

She's kind of the last of a breed of designers that have, you know, their own name on the front door because, you know, we've seen in recent years these conglomerates snapping up all the family owned fashion brands.

[Ryan Knudsen]

What are Idol's plans for the company now? Like, where do you, where do you think this company might go?

[Suzanne Kapner]

Well, assuming he doesn't sell the brand, you know, he has said he's dedicated to, you know, keeping Versace, you know, at the high end of luxury. He doesn't want to cheapen the brand. He wants to make it even more luxurious. A focus on craftsmanship and, you know, elegant designs. So I think you're going to see more of that and less of the bright prints and the baroque patterns and the kind of outrageous, flamboyant designs that Versace was known for in the past. And, you know, Versace now is going to be sort of a little bit less like Versace.

[Ryan Knudsen]

Before we go, do you have any questions about the Trump administration? Like about Trump's order to dismantle the Department of Education or the war plans that were accidentally leaked over a group chat. Email us and let us know. Please send a recording of your question to thejournalsj.com that's thejournalsj.com that'S all for today. Tuesday, March 25 Special thanks to S and P Global Market Intelligence for Investor Meeting Audio. The Journal is a co production of Spotify and the Wall Street Journal. Thanks for listening. See you tomorrow.