A model displays a creation as part of Versace's Spring/Summer 2007 women's collections during Milan Fashion Week September 29, 2006.. Photo Credit: REUTERS/Stefano Rellandini

By Sophie Hardach

MILAN (Reuters) - Gone were the acid colours, gone were the clinging plastic trousers, as Versace feted its new, sober style with 1960s cream shift dresses and geometric prints.

Platinum-haired Donatella Versace hasn't completely left behind her glamorama days -- pop star Prince sat in a celebrity-studded front row, huddled in a cream-coloured coat, and watched models strut past to the pumping beats of his music.

"You don't have to be rich to be my girl," Prince's voice squeaked through the loudspeakers, but the girls on the catwalk told a different story with cool thigh-skimming dresses and gold-handled bags that were made for the jet set.

Versace plunged into heavy losses after founder Gianni Versace was murdered in the 1990s, and sales dived as his sister Donatella veered from one screamingly flamboyant collection to the next.

It has since then undergone a radical turnaround cure, repositioning itself as a super-luxury brand, shedding loss-making units and boosting its profitable accessories business -- cue a green clutch bag and white leather bags dangling from gold chains in Friday's fashion show.

Brown, black and white geometric print dresses, a mustard yellow empire waist dress, chocolate-brown shorts and tailored jackets followed that sensible, business-conscious spirit.

Amid the wearable, sellable clothes, Donatella Versace's love for glamour shone through in the form of gold straps on white dresses, angel wings on a white and silver gown, a gold-plate bustier and a long pink princess gown.

The 1960s shift dresses, the nods to Gianni Versace's high-octane style were in line with a retro-happy fashion week.

With Giorgio Armani looking back to the elegant days of his youth, Gucci and Burberry yearning for the 1960s and Dolce & Gabbana throwing in some 1980s aggressiveness, Milan fashion week was too nostalgic for some.

"Milan's been a little bit disappointing," said Anna Wintour, editor of American Vogue and the only journalist to be escorted through the queuing crowds by four burly men in suits.

"There are too many designers here looking to the past, going through their old magazines ... I am looking forward to Paris," she said with a smile.

Canadian label DSquared had jumped on the retro train earlier that Friday, reconstructing an Italian piazza for its Dolce Vita-themed fashion show and blasting out 1950s summer hits.

Twins Dean and Dan Caten had set up café facades complete with bustling waiters and loitering young men on scooters to create the right mood for their yellow or navy-with-gold-buttons jackets, ice cream-pink striped mini-dresses, shorts and cropped Capri trousers.