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Authors: Gioia Diliberto

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By then she was smitten. Paulo made her feel like a natural woman, in the words of the Aretha Franklin song, and she invited him to New York. Diane was a stressed-out businesswoman and single mother. She was lonely. At the end of the day, when the streets of New York bustled with commuters in taxis and buses on their way to high-rise apartments and brownstone walk-ups, Paulo would be someone to go home to, someone to eat dinner with, someone to talk to about something besides look books and Passion Pink lipstick.

At first Paulo stayed with Gelbsman in his apartment on Eighth Street and Fifth Avenue. Diane knew that her children had to get used to him before he moved permanently into their lives. To introduce him to her friends, she threw a party. “It was winter, and I remember he was wearing a sarong and a cashmere sweater,” says Gelbsman. “We get to Diane’s and everybody you could imagine is there, including Diana Ross and Diana Vreeland.”

Diane’s friends were mostly appalled that she actually was serious about “this guy she met on the beach,” recalls Fran Lebowitz. “A less romantic person would have left him on the beach. But Diane imports him to New York, and now does this mean we all have to talk to him for two years or however long she keeps him around? He was very rough, and my impression was he was not that smart. I didn’t find him interesting.”

Paulo went back to Bali for a while, then returned to New York, preceded by crates of his possessions. He was coming to stay. Diane took her
Mercedes to the airport to pick him up at four thirty one morning. She’d fasted for two days before. “I’m purifying my body so I can
feel everything more
,” she told Julie Baumgold. “I had become so DVF; I had to get out of DVF. I’m more creative now. I’m seeing everything bigger, freer.”

Paulo had no job in New York other than to be Diane’s companion. Still, he released in her a flood of ideas. She called her new cosmetics line Sunset Goddess and based it on the romantic hues of the sunset over Bali’s Kuta Beach. Before they’d met, she’d been thinking of marketing a new perfume called Deadly Feminine. Now, inspired by her explosive meeting with Paulo in the shadow of a Bali volcano, she decided to call the new fragrance Volcan d’Amour. Vulcan, the god of fire, including volcanic conflagrations, was married to Venus, the goddess of love. A perfect match, like she and Paulo. They worked on the scent together.

The perfume’s volcano-shaped glass bottle with the black top was designed by Dakota Jackson, who’d also designed the twelve-foot-wide “cloud” bed in Diane’s New York apartment—it had a headboard covered in pink satin and was lit from behind to resemble the moon in shadow. The bottle was made in Normandy “in a factory that specialized in exotic bottles,” says Gary Savage.

It was packaged in an oversized black box emblazoned with a deep-blue nighttime seascape that had been painted by a Brazilian artist Diane met in Bali. Included in the box was a poem Diane had written for Paulo:

Into my life you came
Bringing peace to my heart
Fire to my body
Love to my soul
In your eyes I see myself
Feeling, reaching, looking
For perfect harmony.

She launched Volcan d’Amour at a breakfast for the press in her office, which had been decorated with thousands of frangipani flown in from
Hawaii and arranged in the shape of volcanoes. Reporters dined on apricot pancakes as a band played Indonesian music. Later, models in blue sarongs that had been hand-painted with gold volcanoes at the Denpasar market in Bali spritzed shoppers at Saks with Diane’s new fragrance.

With Tatiana, Diane created a classic
bouquet des fleurs
. For Volcan d’Amour, she strove for something completely different—an exotic elixir.

The dominant note was a strong, purple violet, like the flowers grown on Mount Etna, where, according to mythology, Vulcan had lived. Unfortunately, the fragrance wasn’t “particularly pleasant,” says Savage. Fashion executive Rose Marie Bravo says, “Everything about it was wrong—the bottle, the scent. It was heavy. It just didn’t work.”

Customers didn’t like it. Despite Diane’s passion for the new scent, not to mention her frenzied promotion of it, Volcan d’Amour flopped.

Paulo’s influence stretched everywhere into Diane’s life. Suddenly tropical prints appeared in her sheets for Sears. She decorated her office with a gaggle of carved wooden Balinese geese. Along the river that ran through her property at Cloudwalk, she planted twenty-foot-high Balinese flags in bright crayon colors and covered her furniture in Indonesian batiks. Instead of clingy jersey dresses, fishnets, and stilettoes, Diane now wore sarongs and padded around barefoot, just like Paulo. “Why don’t you wear real clothes?” Lily asked her. Lily never liked Paulo and was dismayed that Diane had submerged her style in his.

In light of her fierce determination to be independent, the way Diane changed her life around for Paulo shocked her friends. “Diane is the most romantic person I know, and the most willing to change everything around for romance,” says Fran Lebowitz. “And it’s exactly opposite of other aspects of Diane. So that, in this area of life, Diane will jump out of a window, and in every other area of life, she wouldn’t.”

Diane herself explained it by her deep yearning to lose herself in love and to find relief from the stress of business. She was ready to be submissive to a man, to lead a calmer, more satisfying domestic life.

For once she wanted to be taken care of. Never mind that it was Diane
who paid the bills. Paulo tended to her needs the way no man had before. He spent hours browsing with her in rare bookshops and fabric stores as she hunted for ideas for new prints. He accompanied her on business trips, ironing her clothes in hotel rooms while she showered.

“He was a nice guy and loyal to her, but he didn’t have a true understanding of what she was doing,” says Savage.

That didn’t stop him from giving her advice. “He was always around the office,” recalls Sally Randall. “We were happy that he was making her happy, but he was no match for Diane. He always looked like he was ready to hit the beach, even in winter.”

At the time, “people were dying of AIDS in the fashion industry, in her social circle,” says Tatiana. “I get that she’d want to go in the opposite direction, if just for her safety. Paulo was someone with whom she could start fresh. It was also reassuring because he was quite manly”—that is, his sexual preference was entirely for women.

Diane’s relationship with Paulo also coincided with her children becoming teenagers and pulling away from her. Alex turned rebellious and started getting into trouble in New York. He was drinking and, he recalls, “taking my skateboard and going to Area [a popular Hudson Street nightclub] at two in the morning. My mom said, ‘That’s it. I’m moving you to Connecticut,’ and my sister had to go along with it.”

Diane moved the children to Cloudwalk full-time and enrolled them in Rumsey Hall, a local private school that emphasized athletics. Alex, who played every sport, loved it. “I was super successful at Rumsey. I had girlfriends, a motocross bike, and a track at Cloudwalk, and I used to race around with my friends,” he recalls. But Tatiana, who’d been a star student at Spence, the private school in Manhattan, was miserable. She still suffered from the muscle disorder that prevented her from participating in sports, and, she says, “my currency at Rumsey Hall went way down from what it had been at Spence. I didn’t understand the kids in Connecticut, so I just buried myself in my books and I skipped a grade.”

With Diane’s hectic schedule, her preoccupation with Paulo, and
her inclination to suppress unpleasant realities, she failed to see Tatiana’s unhappiness. To make matters worse for the girl, Lily was living in Geneva with Hans and spending time in Brussels with Philippe and Greta, who’d just given birth to the couple’s first child, a daughter, Sarah. “I missed Lily terribly, but I didn’t know how to dial the numbers to call Europe. I was an angry, unfulfilled, really sad adolescent,” Tatiana says.

Paulo mostly stayed out of the children’s way. He built a cottage on Cloudwalk property—“my mom let him so he’d have something to do,” says Alex—that he used as a retreat. Occasionally, he gave the children presents. Paulo bought Alex his first motocross bike. Still Alex and Tatiana resented him. “Me and Tats thought, ‘The guy isn’t doing anything, and he’s living off Mom,’ so we didn’t have much respect for him,” says Alex.

One evening when Alex, Tatiana, and Paulo were to drive into the city to meet Diane, Paulo and Alex got into a terrible argument. The children were eager to get to Manhattan, and Paulo seemed to be dawdling, which angered Alex. The row ended with Paulo striking Alex in the jaw. Diane says the blow was more of a slap than a punch, but Alex had recently broken his jaw in a car accident, and he collapsed to the floor in pain. Tatiana called the police. When they arrived, she was waiting for them at the door with her arms crossed over her chest. “I’m so glad you’re here,” she said.

Diane declined to press charges, much to Tatiana’s disappointment. “You know, [I ]
could
call
People
magazine,” she told her mother.

Diane acknowledges the difficulty of Paulo’s situation. “He was barely thirty; he’d been living alone on the beach in Bali. He was a hippie, really, and I was this huge success.”

Paulo tried to get along with Alex and Tatiana, and he seemed genuinely fond of them. He kept an eye on them when Diane was working in the city. It was Paulo, in fact, who first noticed Tatiana’s distress and “told me she was unhappy,” says Diane.

She was just as oblivious to her business troubles. While Diane traveled
with Paulo, often to remote Indonesian islands to hunt for exotic textiles, her executives in New York borrowed increasing amounts of cash to keep her company afloat. Since selling her dress division to Carl Rosen, cosmetics and scent had comprised the bulk of Diane’s business, and both required huge infusions of money for advertising and inventory—money Diane didn’t have. Every week Savage and Zinovoy put the financial reports on Diane’s desk, and every week she ignored them.

One day in 1982, when Diane was in Paris, she got a call from her office in New York: Chemical Bank had refused to loan her business more money unless she signed a personal note of guarantee. “Suddenly all I saw was the loss, the loss of Cloudwalk, the loss of my apartment,” she wrote.

Back in New York, she met with a banker at Chemical who told her she owed a staggering ten million dollars. “What do you want me to do?” she asked him. “Sell the company?”

He looked at her with a condescending sneer. “If you can,” he said.

Diane began negotiations with Beecham, the English pharmaceuticals company. It was a period when she was not close to Barry Diller. “I wasn’t involved,” he says. “I don’t even know if we talked about it.” Things might have gone quicker if she’d had his counsel. In the end, it took three agonizing months for the deal to go through. During this time, Chemical Bank continually pressed Diane for repayment of its loan, and Diane was nearly out of her mind with worry, as she had been when her dress business tanked in the late seventies. She feared she’d lose everything.

In the end, she sold her cosmetics business to Beecham for twenty-two million dollars in 1983, which left her with twelve million after paying off Chemical Bank. Puritan had stopped manufacturing her dresses the year before and had stopped paying her. With her real estate, jewelry, art, furniture, cars, and cash, she had assets of sixteen million dollars.

To celebrate the Beecham sale, she bought herself a matching set of eighteenth-century English aquamarine jewelry—necklace, earrings, and brooch—at La Vielle Russie, a pricey antique store in the Sherry-Netherland
Hotel on Fifth Avenue. On the way out, she noticed an empty store on the far side of the lobby and, on impulse, decided to rent it.

Her plan was to sell high-end items, including made-to-measure couture clothes of her own design. She hired Michael Graves, the renowned postmodern architect famous for his small circular windows and squat columns, to design the fourteen-hundred-square-foot duplex space. She invested two million dollars in the project and charged Graves with designing “a shrine to Venus, a glorification of women,” she said. She gave Graves a favorite pre-Raphaelite painting to show him the mood she wanted—at once modern and ancient.

Diane began having second thoughts when she sat next to Andy Warhol at a dinner at the steakhouse Club A. He told her “not to count on a May opening,” as Graves was notorious for dragging out projects. Warhol also warned her that Graves would “probably take her little store and divide it into fifteen rooms with forty columns in each, and then she got scared.”

Warhol was right about the delay. The shop didn’t open until late fall 1985. To mark the opening, Diane held a party at Regine’s—a gaggle of VIPS from Ted Turner to Diana Ross showed up. Afterward, her guests got a tour. The maple Biedermeier-and-glass display cases on the first floor held cosmetics, jewelry, scarves, and the little 1940s hat with a red rose and veil that Diane had worn with a black pantsuit for a
Vogue
ad promoting her new venture. A stairway led past trompe l’oeil marble and faux copper latticework to the pink-carpeted custom collection and fitting rooms. The made-to-order clothes designed by Diane were divided into five categories according to “occasion”—Smart Lunch, Vernissage, Party, Hostess, and Gala. Having dressed the average American woman, Diane was now going for the “fairly thin and fairly rich” crowd. The ready-to-wear started at five hundred dollars for a blouse; the couture collection at eighteen hundred for a skirt. One three-thousand-five-hundred-dollar silk and satin evening gown sold to Aretha Franklin. The clothes on the first floor were
available in sizes 4 to 12, though Diane would make a size 14 for someone who requested it.

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