CHAPTER 17
DKNY—A New Brand, a Diffusion Line
The first seven easy pieces comprising the Donna Karan New York collection line debuted in 1985. Donna and I knew the company was heading in the right direction, but it was hard to convince others when the bottom line seemed to sink deeper into the red. All of my peers thought the company would go broke, and I would lose everything I had earned at the Anne Klein Company. Accountants, lawyers, and many businesspersons struggled to find proper valuations for the many intangibles on the company’s balance sheet. Donna’s talent was perhaps the most nebulous of all. After two and half years of bleeding, Donna Karan New York reached a precipice: Revenues were on track to grow larger than operating expenses, and we would reach the black. However, much like the Anne Klein Collection, Donna Karan New York was catering to a wealthy demographic, and we needed to branch out to increase our top and bottom lines.
The concept of the bridge line as we applied it at the Anne Klein Company didn’t seem to fit with Donna’s new design. A diffusion line is quite different from a bridge line. Diffusion lines do not necessarily offer similar products at different price points and, thus, different manufacturing processes and fabrics. On the other hand, a diffusion line functions as a proxy to the original line, a kind of extension into another area of one’s lifestyle. The Donna Karan diffusion line was started to offer the same consumers a new spin and a broader ...
