Harking back to the basics
Donna Karan and her husband, Stephan Weiss, founded their clothing company in 1984. Donna Karan's first collection, launched in the fall of 1985, was based on the premise that every woman needs "seven easy sportswear pieces:" blazers, Oxford shirts, jumpsuits, dresses, chinos, sweaters, and coats. Especially popular with the new waves of power-suit wearing career women: the bodysuit, which combined the ease of a T-shirt with the sleekness of a blouse.
Widespread yet exclusive
In 1989 Donna Karan launched its bridge line, DKNY, adding the "NY" to symbolize a young, fast-paced, New York attitude. There are two designer labels under the Donna Karan name: Collection and Signature. DKNY includes an array of five labels: D (a collection between bridge and "designer"); DKNY; DKNY Classic, which sticks to the "seven easy pieces" equation; DKNY Active; and DKNY Jeans. The Karan men's line has two designer labels and one bridge label. The company also produces accessories, shoes, fragrances, and toiletries for men and women. Karan grants licenses to manufacturers for the production of hosiery, eyewear, children's apparel (DKNY Kids), and eyewear. At present, Donna Karan sells its products in "better" department and specialty stores such as Bergdorf Goodman, Bloomingdale's, and Nordstrom. Donna Karan also has 51 free-standing stores through licensing deals, and 52 outlet stores.
Deflating Donna's purse
Donna Karan International, Inc. went public in June of 1996, and has struggled since then under the burden of sluggish earnings and a failed licensing deal for its jeans line. As a result, Karan began the search for a more seasoned manager to handle the business side of the company. In August 1997, the company brought in John Idol, former group president and divisional COO at Polo Ralph Lauren. Idol became the Chief Executive Officer, and Karan retained the titles of chairwoman and chief designer. The new CEO's first course of action was to reduce costs, which involved the elimination of 285 jobs, and streamlining the business from 13 divisions to six. Karan herself agreed to reduce notoriously extravagant spending on fabrics, advertising, and fashion shows, and the company licensed its beauty products business to Estee Lauder. Donna Karan also licensed its name to Liz Claiborne, who will launch an as-yet-unnamed line of women's casual clothes to be sold at department level prices in Spring 2001.
Even though Karan agreed to also reduce her base salary over the next couple of years, the decrease shouldn't effect her much, thanks to the Gabrielle Studio agreement. Under these terms, Karan and her husband receive annual royalties on all sales of Donna Karan and DKNY products for use of the trademarks. In 1999, the couple raked in a cool $25 million in royalties. Not bad, seeing that the company itself only took in $10 million in profits.
A new horizon
In less than a year, John Idol managed to turn things around. The first quarter of 1998 saw earnings skyrocket, while expenses fell from $44.6 million to $37.7 million. In addition to further licensing deals (for DKNY jeans, children's wear, and accessories), the company has grown through expansion of the brand into home furnishings and clothing lines for infants and toddlers. Not only that, but the company is also moving to expand internationally. Donna Karan has acquired licensing agreements with companies in South Korea, Australia, and New Zealand. The company already has 15 free-standing retail stores in the Far East, but with a new licensing contract, new stores are aimed to open in more areas, such as Hong Kong, Taiwan, China, Indonesia, and Thailand, among others.
Interested applicants can send a resume directly to the Human Resources department at Donna Karan, via fax or snail mail.
"I just sent a resume and they called me in for an interview," reveals one insider. The truth is, you're "probably not going to get a design job [by sending in a resume]," notes another contact, "but you want to get your foot in the door." A good idea is to keep in touch with the HR people, and work from there. If you make a good impression, they will keep your resume on file. Many employees in the company start out with an internship, and secure full-time positions as jobs open up. "One of the coolest things about the company," says one insider, "is that people can get into the company with no fashion background." On the business end there are jobs in accounting or merchandising, for example. On a more creative level, there are jobs an outsider may never even have thought of, like assisting the Trunk Show or writing for Creative Services the department that puts together "Woman to Woman," a quarterly pamphlet containing "sisterly advice," and updates about the company.
Donna Karan is not a formal 9-5 environment, and many late nights and weekends can be expected for designers and some corporate types. But employees in other areas, such as pattern making and quality assurance, say the hours are "awesome ? most days we're in at 9:00 and out by 5:30 or 6." The dress code at the company is "casual but chic." "It's a fashion house - the people that work here like looking good."
DK insiders describe the corporate structure as "very laid-back," even with Idol's budget and personnel-slashing. Despite recent layoffs and spending cuts, employees are generally happy. They say Donna Karan is a great company to work for, for myriad reasons: "There's lots of opportunity for young people ? especially if you are good with computers," says one insider. Like many younger design houses, Donna Karan is using computers more and more in the production process. "The company is looking to keep things young and vibrant ? and that means hiring people who are open to new technologies in the industry." Many describe Donna Karan as a "friendly, family-type environment, ? a place where employees are always learning from one another." "I've learned more here in one year than I did in four years of school," gushes one young employee. "You get a real view of how much goes into making the clothes." Says another insider, "This is definitely a company I feel like I can grow with."
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