WHAT HAPPENED TO DONNA KARAN?
Killing the luxury collection, deleting social media, hiring new designers: What’s really going on behind the scenes
IN July, news broke that Donna Karan was stepping down as chief designer of her namesake company and that her high-end line would be suspended. Although many were saddened, few were shocked. The writing was on the wall long before the 66-year-old designer released her parting statement, saying that after “much soul-searching,” she wanted to focus on her philanthropic side-gig, Urban Zen.
Although Karan has always insisted she’s “married to her company,” as she told Women’s Wear Daily in March, there were signs the designer was slipping away from it as early as 2001 — the year she sold her business and suffered the loss of her husband and co-CEO, Stephan Weiss. By then, Karan had garnered a reputation for excess spending, drawing criticism for licensing ventures that racked up debt and diluted the allure of her luxury brand.
“I saw it coming,” says Mark Stevens, CEO of branding firm MSCO. “It all traces to the undeniable fact that Karan started Zen-ing out long before she decided to toss out that excuse for failure.”
In February 2014, Page Six reported that Karan was rumored to be on her way out, noting the designer’s tearful bow at her 30th anniversary New York Fashion Week show. That August, the designer’s Madison Avenue flagship shuttered.
Speculation resurfaced this year when, after three decades with the company, Karan’s publicist Patti Cohen left in May, less than a month after it was announced that Dao-Yi Chow and Maxwell Osborne, the duo behind buzzy brand Public School, would replace Jane Chung at the creative helm of Karan’s diffusion line DKNY.
The sequence of events was strategic and the result of a corporate re-evaluation, says Bertrand Pellegrin, founder of B. on Brand, a consulting firm that’s worked with LVMH, the luxury conglomerate that owns Donna Karan International.
“LVMH is reviewing its portfolio right now, taking a good hard look at the brands that they have and trying to figure out which need to be resuscitated,” says Pellegrin.
Donna Karan founded her mainline collection in 1984 and quickly rose to fame with the success of her “seven easy pieces” concept — a mix-and-match approach to dressing that resonated with legions of affluent working women. In 1989, she launched the lower-priced DKNY, calling it “the pizza to [the main] Collection’s caviar.” That too was a hit. But an aggressive expansion plan in the ’90s saw the streetwise diffusion line dumped into outlet stores and bargain retailers like Marshalls and T.J. Maxx.
DKNY’s ubiquity did nothing to bolster LVMH’s prestige — but it was, and remains, profitable. Of the $444 million Donna Karan International made in 2014, more than 90 percent of revenue came from the DKNY brand, according to June 2015 reporting by Reuters. By contrast, the upscale Donna Karan Collection did little to help its parent company’s bottom line.
Although Linda Lightman, 53, a former Karan shopper, and founder and CEO of luxury consignment site Linda’s Stuff, considers Donna Karan an icon, she admits the name lost its edge and has scant significance for most millennials — including her own employees.
“They’re like, ‘No one cares about Donna Karan,’ ” she says of the 20-somethings in her office. “But I do. I think somewhere along the line she lost that audience. She didn’t keep up with what the millennials are looking for.”
LVMH is now hoping to regain those customers by focusing solely on DKNY — and they’re taking drastic measures to do it. In August, DKNY’s Instagram and Twitter accounts were wiped clean. Days later, the brand’s senior vice president of communications Aliza Licht, the voice behind the popular DKNY PR Girl Twitter handle, stepped down.
The social-media cleanse is a decisive move to make way for Osborne and Chow, whom Pellegrin says were hired for their cool factor as much as — if not more than — their talent. “They are very New York in a way that Donna was very New York 20, 25 years ago,” he says of the pair, who will present their first New York Fashion Week collection for the label on Wednesday. “They could probably design for just about anyone and give them the street cred they need.”
Stay tuned.