Karan, Donna - Overview, Personal Life, Career Details, Social and Economic Impact, Chronology: Donna Karan

(1948-)

Donna Karan International Inc.

Overview

Donna Karan has earned a reputation as an innovative marketer and world-class fashion designer with her label Donna Karan New York. Formerly a co-designer of Anne Klein, her small start-up company expanded into a fashion empire during the 1980s.

Personal Life

Donna Karan was born Donna Faske on October 2, 1948, in Forest Hills, New York. Her mother was a model and her father a clothes retailer. As a youngster, Karan became obsessed with fashion and attended Parson’s School of Design. She left the school without graduating to take an assistant’s job at Anne Klein, however, and in 1987 she received an honorary fashion degree from the school. In addition to overseeing designs for many years, she also handled the financial duties of her growing business. Karan married Long Island retailer Mark Karan in 1974, and together they have one child, Gabrielle. The couple divorced in 1978, but have remained good friends. In 1983, Karan married sculptor Stephan Weiss. They maintain homes in Manhattan and on Long Island, New York.

Career Details

After being hired for a summer job at the Anne Klein Company, Donna Karan obtained permanent work as an associate designer for the firm. Japanese fashion financier Takihyo Tomio Taki, who was managing the company after the founder’s death, recognized Karan’s talent and drive. He named her and Louis Dell’Olio co-designers and together this team garnished many industry awards for their sporty womenswear collections. In 1982, the company introduced the successful Anne Klein diffusion line. Shortly thereafter, Karan left to found her own company with husband Stephan Weiss. They headquartered the new firm in New York City.

The first Donna Karan Collection, launched in 1985, received critical acclaim. The following years brought an expansion of offerings: swimwear in 1986, a hosiery collection in 1987, the DKNY bridge line in 1988, and, in 1991, the DKNY menswear collection. The following year, Karan founded the Donna Karan Beauty Company, a fragrance and cosmetics division. Since then the company has evolved further, introducing lingerie and a children’s line, DKNY Kids. The Karan empire is now global, with over 300 foreign accounts, including 27 freestanding Donna Karan stores. With a strong following in the Far East and Japan, the company opened an 8,000-square foot flagship store Queen’s Road in Hong Kong. Other recently opened international locations include Kuwait City, Rome, Geneva, Moscow, Shanghai, Johannesburg, Stockholm and Amsterdam.

The fashion industry has consistently recognized Karan’s expertise. She has been the recipient of numerous COTY awards (1977, 1981, 1984, 1985), several Council of Fashion Designers of America awards (1985, 1986, 1990, 1992), a Fashion Footwear Association of New York award (1988), and a Woolmark award (1992).

The 1990s presented Karan with difficult business decisions in her role as chief executive officer (CEO). One of her more controversial moves was a plan to take the company public with a stock offering. The first obstacle towards this goal was the company’s rapid expansion, which left the firm with more debt than warranted by its cash flow. With late deliveries and unexpected demands that the company could not meet, the financial outlook worsened. Karan herself described these times as a “vicious cycle.” It soon became obvious to Wall Street that the firm was not strong enough to proceed with the initial public stock offering. Meeting the challenge head-on, Karan restructured the company’s debt so that growth could continue. New products were added to the beauty and home lines, increasing sales. In addition, a licensing contract was signed for jeans aimed at the baby boomer population. The stock offering at $24 per share took place in 1996, and expansion continued. The cost outlay for the growth eclipsed sales, though, and the company was again in turmoil. Other issues complicated the tenuous situation. The sale of the fragrance and cosmetics division took longer than expected, and there were problems with the jeans licensing agreement. Conflicts over production schedules and product mix kept the company from pursuing this lucrative market. At the 1997 stockholder meeting, the company estimated $100 million in lost revenue due to the collapse of the deal. The result was a fall in the company’s stock price that left investors demanding the imposition of more cost controls.

Karan once again acted decisively by restructuring her role in the company. In a move hailed by Wall Street, she resigned as chief executive officer and named former Polo Ralph Lauren group president, John Idol, to the post. Significantly, he reports not to Karan but to the board of directors. With his previous background in licensing, Idol brings the expertise needed to expand market share. In this way, Karan successfully split her managing and designing duties, while retaining the title chairwoman of the company.

In recent moves, the company segmented DKNY Women’s and its $311 million sales volume into five separate labels, all at different price ranges. They are D, priced between designer and bridge; DKNY, for wide distribution to department stores; DKNY Classics, which focuses on casual dress; DKNY Active; and DKNY Jeanswear. The segmentation of the men’s bridge line is planned for 1998.

Social and Economic Impact

Karan has left her mark as a businesswoman, marketer and designer in the fashion industry. With annual sales in the hundreds of millions, the Donna Karan Company is one of the world’s premier fashion retailers. By presenting interchangeable designs, she has appealed to the casual, work, and designer markets. She has stated that if one has the fundamentals underneath—bodysuits, unitards, bodywrap styles and stretch fabrics—these basics can be put together in endless ways. In addition, many see her clothes as neither specifically day nor night, summer nor winter, which adds to consumer appeal. Her launch of DKNY, the casual line of lower-cost clothes, brought her designer name and styles to working women looking for affordable but fashion-conscious clothing. In the early 1990s, she also incorporated urban trends and put together the Essentials Collection that sold well and prompted a similar men’s line. Her Woman to Woman marketing campaign won acclaim for appealing to stylish, elegant working women.

Karan is a well-known celebrity with many fans in the entertainment and political worlds. President Bill Clinton often wears her suits, as does singer/actress Barbara Streisand and other Hollywood stars. Karan has offered couture lines with women’s dresses at $2,000 and men’s suits at $2,500. And, for those inclined to spend more, there is the Donna Karan Collection—a limited edition signature label. Items include luxurious detailing and hand-painted or hand-dyed fabrics, beginning at $6,000.

Chronology: Donna Karan

1948: Born.

1966: Joined Anne Klein and Company as designer.

1974: Named co-director of design of Anne Klein and Company.

1982: Launched Anne Klein II diffusion line.

1985: Founded Donna Karan New York (DKNY).

1986: Added swimwear line.

1987: Added hosiery collection.

1988: Introduced DKNY bridge line.

1991: Introduced DKNY menswear collection.

1992: Founded Donna Karan Beauty Company (fragrances and cosmetics).

Karan has said that she sees designing as an extension of herself as a woman and that clothes should be simple. They are, she says, an expression of the many roles she has had to balance: wife, mother, friend, and businesswoman. Her goal, she emphasizes, is to simplify dress to make life easier and to add comfort, luxury, and durability.