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Donna Karan's defense of Weinstein is taking its toll

Bloomberg photo by Craig Warga
Donna Karan's clothing lines already were struggling before she sparked a fury over remarks Sunday asking whether victims of sexual harassment were "asking for it." Shares of the company that owns Donna Karan International have fallen nearly 10 percent since last week.
Bloomberg photo by Craig Warga Donna Karan's clothing lines already were struggling before she sparked a fury over remarks Sunday asking whether victims of sexual harassment were "asking for it." Shares of the company that owns Donna Karan International have fallen nearly 10 percent since last week.

Donna Karan’s clothing lines – from which Karan stepped down from her leadership role in 2015 – already were struggling before the designer made controversial remarks this week asking whether victims of sexual harassment were “asking for it.”

But retail analysts said Karan’s comments, which she made after a number of women said they had been sexually harassed and assaulted by film producer Harvey Weinstein, have further complicated turnaround efforts at her namesake brand.

“How do we present ourselves as women?” Karan was reported as saying at an awards ceremony Sunday evening in response to a question about the accusations against Weinstein. “What are we asking? Are we asking for it? By presenting all the sensuality and all the sexuality? What are we throwing out to our children today? About how to dance, how to perform and what to wear? How much should they show?”

Karan later told the New York Times: “It’s not Harvey Weinstein, you look at everything all over the world today, you know, and how women are dressing and what they’re asking by just presenting themselves the way they do. What are they asking for? Trouble.”

On social media and elsewhere, the reaction has been swift: TV host Megyn Kelly and actresses Mia Farrow and Rose McGowen have said they will stop buying Donna Karan products, and an online petition with more than 8,000 signatures is calling on Nordstrom to drop DKNY and other Donna Karan-branded apparel, bedding and accessories. Shares of the company that owns Donna Karan International have fallen nearly 10 percent since last week.

“What she did was a terrible mistake,” Paula Rosenblum, managing partner of Retail Systems Research, wrote in an email. “General consensus is she just broke her brand.”

Karan has since apologized for her comments, which she say were taken out of context. “I believe that sexual harassment is NOT acceptable and this is an issue that MUST be addressed once and for all regardless of the individual,” she said in a statement released by her publicists. “I am truly sorry to anyone that I offended and everyone that has ever been a victim.”

Representatives for Donna Karan International and its parent company, G-III Apparel, did not respond to requests for comment.

On Thursday, Nordstrom spokeswoman responded: “We’ve heard from some customers, and we certainly understand their concerns. We’ll continue to listen to their feedback.”

Beginning in February, Macy’s will be the exclusive retailer of DKNY products.

G-III Apparel purchased Donna Karen International for $650 million in December. The New York company also owns Calvin Klein and Tommy Hilfiger. And it manufactures clothing and accessories for first daughter Ivanka Trump’s brand, which has weathered its own share of boycotts and negative press.

“The acquisition of Donna Karan fits squarely into our strategy to diversify and expand our business,” the company said on its website. “We intend to focus on the expansion of the DKNY brand, while also reestablishing DKNY jeans, Donna Karan and other associated brands.”

Karan, 69, founded her eponymous fashion house in 1984 and eventually sold it to the French conglomerate LVMH Moët Hennessy Louis Vuitton in 2001. In the years since, analysts say the brand has lost much of its luster.

“DKNY is a brand that has been struggling for years – that’s why LVMH got rid of it,” said Milton Pedraza, chief executive of the Luxury Institute, a New York-based research firm. “Somewhere in the past along the way, it’s lost identity and direction.”

G-III Apparel, however, has vowed to reinvigorate the brand. In the most recent quarter, the company said the Donna Karan and DKNY brands brought in $45 million in sales, accounting for about eight percent of the company’s total sales. “We believe that our investment in Donna Karan was the right one for our company,” G-III chief executive Morris Goldfarb said in an earnings call with investors last month. “We continue to see Donna Karan as potentially the highest operating margin business in our portfolio. “

But analysts said Karan’s recent comments could still introduce new challenges, even if shoppers have a short attention span when it comes to consumer boycotts.

“Was this a screw-up? Yes,” said Pedraza of the luxury institute. “It might cause some short-term issues, but I think people will forgive it in the long term.”

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