By  on February 11, 1994

NEW YORK -- Though they're calling their parting "amicable," separate conversations with Donna Karan and Peter Arnell this week indicate that all is not sweetness and light between the former collaborators.

Karan has brought her $14 million advertising and marketing effort in-house under the direction of Trey Laird, creative services director, who formerly worked for Arnell.

Reports had been circulating for more than a year that Arnell, chairman of the Arnell Group, was growing increasingly frustrated with an account that kept moving further and further in-house.

"I felt stifled," Arnell told WWD. He noted that there were many ideas he had for Karan's company, but that he was held back by financial restraints.

"In order for me to do what I do, I need a tremendous amount of funds and opportunities throughout the year to grow the business," he said.

Meanwhile, Karan executives acknowledge the success of the collaboration but view the change as a healthy one for the company. They were also upset at the ever increasing cost of employing Arnell.

"The more things he would generate, the more it would be profitable for his business," said Karan.

Karan's firm will now save not only on Arnell's personal fees but the 15 percent commission on media buys as well as the 17.65 percent commission tacked onto every advertising expenditure paid to the Arnell Group, said sources.

"Peter had brilliant ideas, but we have to do one thing at a time. We can't have marketing run the company," said Stephan Weiss, Karan's partner and husband.

But, in Arnell's opinion, it was "the real idea stuff that would move the market."

"You can't deny," Arnell added, "that some of the greatest ads Karan was known for were complete experiments," citing the pictures of New York City by Denis Piel, the thumb through the pantyhose photograph by Arnell and the DKNY WALK campaign to launch the shoe company, shot by Francesco Mosto, Arnell's photo assistant.

Though initially innovative, some industry observers charge that Karan's ads had become repetitive and needed freshening up.

But Arnell questions whether an in-house ad department is the solution.

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