Donna Karan International

Karan, nicknamed The Queen Of Seventh Avenue, began working for Liz Claiborne at a very young age. In the 1970s, she then got a job through her mother as an intern with Anne Klein, where she was eventually promoted to associate designer in 1971. When Anne Klein herself died in 1974, Takihyo Corporation of Japan became the new owner and Karan, together with her former classmate and friend Louis Dell’Ollio, became head designer of the house. In 1984 Donna Karan left Anne Klein and, together with her husband Stephan Weiss and Takihyo Corporation she started her own business “to design modern clothes for modern people". She showed her first Donna Karan women’s collection in 1985.

What made her initially famous in the industry was her line of elastic bodysuits. She also became known for her very successful Essentials line, initially offering seven easy pieces which could all be mixed and matched, and created a fully integrated wardrobe. At a time when more and more women in America entered the business world and were looking for sophisticated and elegant, yet simple and functional clothing, preferably in black, white or grey, the company experienced tremendous success with its ‘power dressing’ outfits and was loved by the critics in the 1980s. Ms. Karan always insisted that she would only design clothes, like jersey dresses and opaque Lycra tights, that she would also wear herself. Donna Karan was so New York that the New York Times described her as “Ed Koch in a stretchy black dress” in the early nineties, referring to the then mayor of New York City.

In 1988 Karan extended her women’s Signature Collection by a less expensive line, called DKNY, for younger women. The line was such a hit that Karan can be regarded as the first designer to successfully establish a bridge collection. Two years later she created DKNY Jeans and DKNY for men was launched in 1992, one year after the Signature collection line for men had been presented. The portfolio was later complemented by a kid’s collection, beauty products, accessories and furniture. Sales rose up to $ 510.1 million in 1995 from $ 196.6 in 1991. More than half of the sales are attributed to the DKNY lines, couture contributes 15% and about 30% of the sales are generated by men’s clothing, accessories, cosmetics and other products. Almost a third of the sales are made in exports.

The European DKNY business was damaged in the early 1990s by poor quality and flawed logistics which resulted in the creation of a European supply center in Amsterdam, Netherlands. The company later announced to show their collection at the Milan fashion week in 1996 but later backed out again.

Donna Karan, Inc. and LVMH

In 1996, Donna Karan went public and became Donna Karan Inc. That move had been attempted before but had to be cancelled due to quality problems in 1995. And after the IPO things did not seem to get better. Ms. Karan was widely known as a fabulous designer but seemed ill-suited as CEO of a large corporation. The recession in Asia did not help either. In 1997 the corporation reported losses of $ 91 million (much of that can be contributed to intensive restructuring efforts, though). The company’s stock fell from $ 24 in 1996 to $ 9 in the year after. The French luxury giant LVMH bought Donna Karan and its associated trademarks in April of that year for $ 643 million, of which $ 400 million are said to have gone to Ms. Karan. It is also said that for the sake of her employees one of the provisions of the takeover was that none of Karan’s staff could be fired without her consent. Nevertheless, intense turnover in senior management proved to be damaging to the company. As a measure to increase sales, prices on the company’s DKNY Spring 1999 women's collection were cut by 15 -25% and by 25-35% on its DKNY men's line.

In mid-1997 Donna Karan quit as CEO of the company but has officially remained chairwoman and designer in charge fo the Donna Karan line. Actually, the line these days is designed by Peter Speliopoulos, a talented former Cerruti designer, with Karan contributing little subtleties or even entire new creations. The DKNY line is entirely designed by Jane Chung, a Karan employee since the days at Anne Klein. Most merchandise is licensed. Liz Claiborne markets the DKNY Jeans and Active brands lines, Estée Lauder is in charge for the cosmetics business. In 1997, Donna Karan signed licensing deals with Wacoal America for men's and women's DKNY intimate apparel, Esprit for DKNY children's apparel, Phillips Van Heusen for DKNY men's dress shirts, Mallory & Church for DKNY men's ties and hosiery, Peerless Clothing for DKNY suits and sport coats, and Max Leather for belts and small leather goods.

John Idol, a former executive at Polo Ralph Lauren, has been CEO of Donna Karan since 1997. It is he who is said to have saved the company from bankruptcy. In 1998, things had turned around and Donna Karan added more licensing agreements and expanded internationally. In the early 2000s, prices were raised again for DKNY clothing to avoid competition with the likes of the Calvin Klein sportswear line. A DKNY men’s dress shirt sells now for about $125 while a Calvin Klein sportswear dress shirt is almost half. The couture Donna Karan Signature line for men has been pulled from the market.