For a lavish fashion and jewellery show in London next week, Donatella Versace is shipping over a glass catwalk and several tons of crystals to twinkle beneath it. At her Milan palazzo, the most powerful woman in the business tells Susannah Frankel why diamonds are a feminist issue
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DONATELLA VERSACE looks as though she couldn't be happier. But then, the subject of conversation - diamonds - is one of her favourites, something of a speciality in fact. The most powerful woman in fashion is curled up in the corner of an overstuffed, tomato-red sofa at the Versace palazzo in Milan, poring over pictures of some of the world's most ornate and opulent jewellery.

In front of her are a sparkling, diamond-encrusted feather, a glittering arm-bracelet, a "How you say eet, boucle d'oreil", all dense with precious stones. Given that she is, famously, among fashion's more extravagant personalities, it is perhaps not surprising that the one that catches her eye, over and above all the rest, is the biggest: a rope of diamonds the colour of sherbet strawberries and lemons, finished with a single, dazzling gem about the size of a child's fist.

"It's 137 carats," she tells me, matter-of-factly, lighting a full-strength Marlboro. "It's my favourite. I, personally, would wear it with a bikini on the beach. Black bikini, dark sunglasses ... But maybe not in front of the Prince of Wales. Hahahahaha."

On Wednesday night (in the presence of the Prince of Wales), Donatella Versace and Anthony Oppenheimer, president of the diamond company De Beers, are hosting a gala dinner and fashion show at Syon House, south-west London, in aid of Gilda's Club, the Ovarian Cancer Research Trust and the Prince of Wales Foundation. Donatella Versace was approached by De Beers to inject the proceedings with a hefty dose of the high-octane glamour for which the Versace label is renowned.

It's "Versace Week In London", according to the mighty Versace PR machine. Two nights later, Donatella is planning to "rock the UK" with the Versace Club at the Versace Jeans shop in New Bond Street, catering to a younger, more fashionable crowd and topped off with a live set by the girl band All Saints.

"Versace has two sides," Donatella explains. "It has a grand side, but even the grand side is not stiff, which is what I'm trying to show people."

To this end, Syon House is, frankly, just a little too staid for the Versace sensibility, so Donatella will be shipping in a glass catwalk (diamond-shaped), several tons of Swarovski crystals to twinkle beneath it, the vivid purple upholstery she uses for Versace shows in Milan and, of course, 80-odd show-stopping frocks crafted in everything from signature Versace silver-metal mesh to stingray (yes, stingray). A carpet of dried lavender will be sprinkled on the lawn at the front of the house - far more fragrant for guests to walk across than mere grass.

The likes of Mikimoto, Bulgari, Chaumet, Garrard and Asprey, meanwhile, will provide the jewellery, much of it designed specifically for the occasion. The show is entitled "Diamonds Are Forever: The Millennium Celebration", and the dress code is "black tie and diamonds", which means, of course, Donatella Versace in her sartorial element. When I ask her if she is nervous about meeting the Prince of Wales, she looks to the heavens.

"Of course I'm not nervous!" she roars. "I think he's the one who is nervous. Hahahahaha."

As well he might be. Donatella Versace is, after all, the blonde bombshell to end all blonde bombshells, a mini- hurricane with the power and sophistication of a by-now impossibly grand and wealthy Italian dynasty at her (diamond-encrusted) fingertips.

In the early Eighties, Donatella, a huge force on the Milan social scene and the woman widely accredited with keeping the Versace label modern through her insatiable appetite for the new, preceded the advent of Girl Power by almost a decade. Less than two years after the brutal murder of her 50-year-old brother Gianni, she has settled into her role as designer-in-chief of the world's most famous label, comprising 15 lines, 273 boutiques and an annual wholesale turnover of 1,735bn lire (pounds 600m). And this despite the fact that she has been violently separated from the person she had been closest to since childhood, forced to deal not only with his loss but also with the rumours that sprang up in the wake of his death.

"It was a tragedy what happened to Gianni," she says. "Some of the media might find a way to make a business out of a tragedy. We are a company but we are still a family."

Immaculately clad servants and staff are all-of-a-flutter in Gianni Versace's former apartment above the showroom and studio in Via Ges as they wait for their diminutive leader to appear. When she does, with a clatter of tiny stilettoed heels and a flick of waist-length tresses, the heavy atmosphere is immediately diffused. Donatella is dressed in a cobweb- knit T-shirt and skin-tight black trousers, trimmed with coral at hemline and hip; she has a huge solitaire diamond on her wedding finger ("Twenty- five carats. I bought it for myself") and another at her throat. She positively beams as she takes her place to be photographed in front of an impressively large Leger, flanked by an army of classical statues, most of them missing their heads.

"I like this!" she smiles. "It makes me look tall!"

As always, the palazzo is filled with the heady aroma of tuberose, the designer's favourite fragrance and the main ingredient of Blonde, the perfume created in her honour by Gianni the year before he died. On heavy oak sideboards scattered through the monolithic stone and marble interior are framed photographs of the extended Versace family: Donatella, Gianni and their mother and father; Elton John and Paul Beck (Donatella's husband and the father of her two children, Daniel, seven, and Allegra, 12). There's a picture of Diana, Princess of Wales, in a purple Versace evening dress; Gianni, again surrounded by children, including Allegra, his principal heir. She inherited his 50 per cent stake in the business when he died; Donatella and her elder brother, company chairman Santo Versace, have always owned the other 50 per cent between them.

The Donatella Versace I talk to today is very different from the woman I met a little over a year ago. Then, her conversation was littered with references to her brother, and the intimidating prospect of taking over the fashion house he had created. At her first Versace ready-to-wear collection, she emerged more tearful than triumphant to take her bows. At her fourth, held in Milan in March and an unprecedented critical success, she stole the show, bounding out smiling and escorted by four pumped-up Versace- clad males.

The secret of her success has been to remain true to the style her brother created - the bold colour palette, juxtaposed with vampish black; the dazzling fabrics; the vertiginous heels and liquid evening-wear - while making it both easier to wear and more contemporary in flavour. Gianni had been famous for his barely-there skirts, for example, but at her first ready-to-wear collection, his sister startled her audience by showing not a single one: they just weren't fashionable at the time.

"OK, let's talk about Diamonds Are Forever," she rasps - her voice is rich like treacle, aided and abetted by the fact that she chain-smokes with much the same conviction as everything else to which she sets her mind. It takes quite some front to use diamonds as a metaphor for feminism but that, it emerges, is exactly what Donatella intends to do.

"Diamonds are something that go very well with women," she says. "Because we're strong, we're very strong. We're indestructible. We get through many more things in our lives than men do. Also they're clear, you see straight through them, and I think there's a kind of integrity to women, they're more sincere."

Donatella was given her first diamond by Gianni and Santo 13 years ago. "I said I wanted a diamond. I was full of pregnancy and work and everything and I thought I deserved a diamond.

"I said, 'I don't want a small diamond, I want a big one.' So I got an 11-carat, oval-shaped, beautiful diamond."

The signs of her flamboyance go back rather further than that, though. Aged only 11, she decided to dye her hair.

"Gianni brought a friend of his who was a hairdresser back to the house. We had to hide him from our mother." The end result was rather too discreet for her liking. "He put a few highlights in but nobody noticed. I was furious. I thought, 'What's going on here?' He said: 'I don't want to do too much. I want it to be subtle.' But I wanted him to do it properly. So I kept adding to it, and adding to it ... "

Donatella's daughter, Allegra, is "completely a fashion victim. She loves clothes. I always try to show her beautiful things." Her son, meanwhile, is left with no option but to resort to fighting off the all-powerful female contingent of his family by attaching hostile notes to his bedroom door. "No girls. No Spice Girls."

"Of course they're special children," she explains. "Apart from anything else, I take them out of school so they can travel with me. Otherwise I'd never see them. But I want them to be prepared for life. It's better that they know what life's about. It's not a fairy tale. Unfortunately, they found that out with the death of Gianni."

She concedes that the children have seen a lot less of her since she took over the firm. "When people say women can accommodate everything, that's not true. We can't and that's very sad."

Her own mother, a dressmaker who died when Donatella was only 20, did not want her daughter to embark on a career in fashion in the first place. "She was in the fashion business, and so was my brother," says Donatella. "She thought it was too crazy for me, the whole thing, that the fashion business was too crazy for a girl. She wanted me to be married with children, independent, yes, but not part of a crazy life. She tried to protect me a bit."

But Donatella was not the sort of woman who needed protecting. Throughout Gianni's career, she not only designed Versace accessories and the younger Versus line but also wore the clothes and lived the life. For her efforts, she was continually described as his muse. "This is not very amusing," came her quite resonably caustic reply. She was aware, even then, that she did much more for the label than that, operating as the world's most high-profile fashion scout and wooing both celebrities and models into the fold.

Today, she continues to expand the company that he launched in the Seventies. Last month, Versace announced the forthcoming opening of Palazzo Versace, the first in a series of resort developments on Australia's Gold Coast, and due for completion in the autumn of 2000. Plans are also afoot to float Versace on the stock exchange. And Donatella is involved every step of the way.

"Being a designer is no longer just about sitting down and dreaming up a collection," she says. "A designer now is head of a group of designers who controls many more things than just that. I am very involved with the marketing of the collections and with the distribution. I would hate people to think I just design for the runway. Most of all, I want people to wear my clothes."

Donatella Versace picks up her handbag (vivid turquoise snakeskin and zebra print), shrugs on a tiny, rainbow-coloured leather jacket and she's off, back to the hub of activity.

In the Atelier Versace studio, where the haute couture collection is worked on by petits mains, women in little white coats trained in the great Parisian houses, preparations for Diamonds Are Forever are under way.

A few alterations are being made to an organza gown embroidered with silver thread (Cate Blanchett wore this very dress to the Baftas) and to an electric-blue metal mesh creation eventually destined, I am informed, for Heather Graham for the premiere of the new Austin Powers movie. Elsewhere, the burgeoning Versace couture client base is also being catered to. One woman has ordered two skin-tight trouser suits, both covered with rectangular sequins - one in scarlet, the other in inky black. Every sequin is sewn on by hand, meaning that each suit will cost tens of thousands of pounds.

Most important of all though, in a far corner, the finishing touches are being put to three identical bikinis in flame, turquoise and lavender. These, I am told, are being made for La Versace herself - haute couture swimwear being an enviable perk of the job. She'll no doubt be putting them to plenty of use this summer on the beaches of Europe and Miami, with her dark glasses and, of course, her diamonds.

"Overall, I'm a very serious person," she tells me, as our meeting draws to a close. "I have my feet firmly on the ground." And I believe her. "I think it is ignorant to call fashion frivolous - it's Italy's second largest economy after all.

"Diamonds are just my weak point. They're the one thing I won't lend. I'd lend my clothes, my shoes, my make-up, everything, but never my diamonds. I feel something for diamonds. Some people use crystals: I use diamonds." 2