"If Gucci is successful, the whole industry will be successful," one fashion executive told me last week.

The luxury sector must excite customers enough to tempt them to buy, rather than repel them with missteps such as the rampant price increases of the past five years. That collective need may explain why Donatella Versace sat in the front row of the Gucci show in Milan on Friday, in a red Gucci coat with gold double-G logo buttons. Although she is no longer creative director of Versace, now owned by Prada SpA, she remains its most important ambassador. Having someone so recognizably associated with another house at such an event is relatively unusual. Her presence underlines that after a two-year, industry-wide slump, even competitors are rooting for Gucci.

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