Versace's 'little princess' niece inherits ailing fashion empire

The grave-eyed, strong-jawed young woman known to her uncle Gianni Versace as his "little princess" came of age with a bang yesterday, inheriting 50 per cent of the Versace fashion empire which last year enjoyed sales of $486m (£268m).

The grave-eyed, strong-jawed young woman known to her uncle Gianni Versace as his "little princess" came of age with a bang yesterday, inheriting 50 per cent of the Versace fashion empire which last year enjoyed sales of $486m (£268m).

Allegra Versace, who was only 11 years old when her uncle was shot dead on his doorstep in Miami seven years ago, was chosen by her uncle as his heir in preference to his sister Donatella and brother Santo, with whom he had been feuding bitterly in the years before his death.

Instead of them he singled out the child of whom he once said: "Allegra tells me the truth about Donatella."

Seven years on, Allegra Versace has grown from a studious, solemn schoolgirl with her hair in bunches and her nose in a history book to a sultry teenager with heavy mascara round her eyes, gold loops in her ears and a vivid Versace T-shirt.

She's looking, in other words, every inch a Versace heiress - if not yet as startling as her mother, Donatella, with her long, peroxide blonde hair. But has Gianni's favourite arrived on the scene too late?

The limitations of Italy's family-based businesses have been cruelly exposed recently: the precarious state of Fiat, following the deaths of Gianni and Umberto Agnelli, and the collapse in bankrupt disgrace of Calisto Tanzi's Parmalat dairy conglomerate, reinforce the view that Italian firms encounter immense difficulty when they get beyond a certain size.

Versace may be no different. Since the murder of the design genius, Versace's fortunes have plummeted. Company sales have fallen in four of the seven years since his death, and in 2003 they suffered a year-on-year decline of 17.2 per cent.

Despite fierce cost-cutting and rationalisation - such as Donatella's decision not to show at the Paris haute couture collections next month, which cost a fortune but bring little direct profit - the company's net debt at the end of 2003 was $142m. With the Elizabeth Hurley safety pin dress and the in- your-face brashness of his designs for clients such as Elton John (a family friend who gave Allegra her first piano), Gianni Versace put his outrageous stamp on the roaring Nineties. But the world has moved on, and it's not clear that Versace knows how to adapt.

For her part, Allegra has made it clear that she is not going to be rushed into anything. Donatella said: "She has asked for time until she is 23 to see what she wants to do." It is reported that she is still hoping to make a career in films.