7 Donna Karan

By Michele Orecklin

In the late 1990s, more than a few critics suggested that Donna Karan had lost her way. A dozen years after she launched her own label to great acclaim, winning the hearts of working women with her streamlined, sexy suits, there was a sense that the native of New York's Long Island had become sidetracked by her interest in yoga and spiritual pursuits, turning out fluttery clothes more appropriate for meditating in Bali than mediating in the boardroom.

For her part, Karan insists she was never out of step, merely ahead of her time. "I don't think the consumer was ready for what I was talking about," she says, sitting next to the Zen rock garden installed on the first floor of the Madison Avenue flagship store. (The store for DKNY, her lower-priced line, is a few blocks away.) "People thought I was weird for using candles and incense, but now I can sell more candles than I can sell clothes."

Whether the cash register is ringing up candles or evening gowns, Karan's business overall seems healthier than it has been in many years. After stumbling with a public offering in 1996 (the stock price plummeted as extra inventory built up in discount stores and staff layoffs broke in regular waves), the company was bought by French conglomerate LVMH in 2001. More recently, CEO Fred Wilson was replaced by Jeffry Aronsson, former CEO of Marc Jacobs. Aronsson says he plans to build on the improvements made by Wilson, who is credited with moving the business back into profitability by controlling distribution and closing outlet stores.

In the past few years, Karan has been through significant personal transitions; in 2001 her husband and business partner Stephen Weiss died of lung cancer. She gives yoga much credit for keeping her balanced, and in the past few seasons, she has drawn praise--rather than confused broadsides--for her collections. There are fewer asymmetrically hemmed skirts, more form-fitting and flattering basic pieces in her signature neutral palette. For fall 2003, she showed a group of white dresses, one a goddess-style evening gown in silk jersey patterned after the dress she made for herself the night before her daughter's wedding in 2002.

While Karan is appreciated for understanding her customers' busy lives, she is also, as one of few women among the major American designers, credited with having a unique understanding of her customers' bodies. But Karan argues that a good womenswear designer is not necessarily one with two X chromosomes, but rather one with talent. "When people ask me why there are not more female designers, I point out that there aren't more female executives in any business," she says. "It's a struggle and a balance to work and be a mother and a wife." That said, she is eager to extend herself even further. "I miss being entrepreneurial," she says. "I think I'll want to once again make something from nothing." --By Michele Orecklin