Fashion Label : Versace on the March

The world's sexiest fashion label is dressing Lady Gaga and launching a high-street range with H&M. So is Donatella Versace bidding for world domination?

Donatella Versace puts the finishing touches to the H&M range.

The two headline fashion images of this week are both of glamorous blondes in skintight, gold-studded, stretch black Versace leather. In the new video for Edge of Glory, Lady Gaga is wearing a slashed, medusa-spiked corset from Gianni Versace's last collection; Donatella took a catwalk bow after this week's Versace menswear show in Milan in a skintight, knee-length, studded-and-zipped dress – which, she revealed the following morning, was an early sample from Versace for H&M, which will bring the Versace look to the high street, when it hits stores in November this year.

Versace is having a moment. The label has not been hotter since the salad days of supermodels in sweet-shop brights on the catwalk and Liz Hurley in safety pins on the red carpet. The significance of the Lady Gaga connection is not to be underestimated: after all, last September when the New York Times ran an article about the power struggles, feuds and mind games that determine the seating arrangements at catwalk shows, one editor, Dan Peres of Details, nailed the key issue: "I want to see who gets the seat next to Lady Gaga." Right now, that seat is occupied by Donatella Versace, and the momentum that Gaga has in pop culture makes that a powerful place to be.

The heart of the Versace brand will always be the prowling, tigerish sex appeal that the label stood for in the 80s. Medusa heads, black leather, a very Italian embrace of sunshine colours, a stiletto with everything and always, always make the boobs look good: that's what Versace is, and will always be. By forging a connection with Gaga, Donatella has found a way to make that heart beat again. According to fashion insiders, Donatella wrote Gaga a letter, telling her that she believed her brother Gianni would have wanted to dress her and offering to open the archives, and Gaga responded enthusiastically, wearing vintage Versace at high-profile appearances. She wore a Versace LBD on the cover of the US edition of Harpers Bazaar last month, and has shown a particular fondness for the Miami-bright scarf prints, on leggings and silk blouses. Donatella, in return, has lavished the singer with praise – and one-off Versace archive pieces that guarantee airtime in the fashion blogosphere.

Is it just me, or does Gaga bears a strong physical resemblance to a young Donatella, as seen in family photos when she was still only known as Gianni's younger sister? Plenty of fodder for amateur psychologists there. But still, I suspect Donatella's motivation is more about the brand than about her own ego. It is as if she is finally ready to take the Versace brand to the masses. She has in the past been hostile to the concept of high-street collaborations – just three years ago, she was quoted as saying: "I work very hard to put the Versace line in the luxury section. I think to put the Versace line in H&M would confuse the brand."

Her change of heart reflects, in part, the astonishing success of high-street collaborations with designers, which have proved to be – when done well – a winner for both parties. In 2009, when Matthew Williamson designed a range for H&M, he worried about the impact on sales at his boutique – would women still shop there, when they could get the name for a tenth of the price half a mile away? As it turned out, his main line sales figures for the period when the H&M collection was on sale were higher, not lower, than usual.

Interestingly, the press releases from both H&M and Versace emphasise that the range will be a celebration of iconic Versace moments, rather than a diffusion-level version of the current collection. As well as the dress worn by Donatella, the women's range for H&M includes a studded micro-minidress, a black-leather biker jacket, some fabulous spike-heeled shoes, an asymmetric black dress and a bright scarf-print silk dress. It is not a retro look – indeed, the silhouette is sometimes very close to the collections Christopher Kane has designed for Versus over the past two years – but the inclusion of a cushion and bedspread in iconic Versace prints from the Gianni era shows a willingness to embrace and celebrate the camp-to-kitsch end of the Versace spectrum, as well as the sleek little dresses.

Lady Gaga wears vintage Versace in her The Edge Of Glory video

Luke Day, fashion director of GQ Style, is by his own admission "obsessed" with Versace, and believes "a Versace resurgence has been bubbling away for a few years now." (Day is the proud owner of a Versace bedspread, which was given by Gianni to Howard Donald. Day, who is Take That's stylist, loved the bedspread so much that Donald gave it to him as a gift.) "All it took was for Donatella to fully embrace the heritage and sexuality of those heady glory years." Sophia Neophitou, editor-in-chief of the influential 10 Magazine, agrees. "Timing is everything in fashion. Donatella knows that; she's so smart. It's all about picking the right moment to bring something back, and making it new and modern." After all, thanks to Twitter and Shane Warne, Liz Hurley's pop cultural stock hasn't been higher since That Dress. A sign, surely, that the time is right for a Versace moment.

Two trends in fashion right now seem to run contrary to each other. On the one hand, the minimalist moment seems to have been overturned in favour of an embrace of flamboyant, taste-be-damned aesthetic: this week's menswear shows featured flame-print jackets (Alexander McQueen) and gold-chain print silk trousers (D&G). On the other, heritage has never been more valuable, with the all-important Asian markets tending to judge the cachet of a brand on its backstory.

There are two brands poised to make this apparent conflict work in their favour. The first is Prada. Miuccia Prada says that she is most inspired by things she hates, and follows up her "bananas" collection with a menswear show based on cheesy golfwear; meanwhile, the "ticker" code for the company's stock market float is 1913, the date the company was founded. The second brand able to embrace off-taste and heritage simultaneously is Versace, a house whose history is as shocking and lurid as it is iconic and extraordinary.

Katie Grand, super-stylist and editor of Love magazine, captures the house in a nutshell. "Versace is about sex, about looking hot, and about rock'n'roll." What's more, she says, it is about fearlessness, and having the guts to really embrace fashion. "Wearing Versace is about not being afraid to let a dress say quite a lot about you. It's not for wallflowers." Six months is a long time in fashion, but it doesn't seem too much of a stretch to predict the look that will dominate the Christmas party season of 2011. And I'm seeing black leather, with gold studs.