NEW YORK -- The Donna Karan Co. is expected to announce today that it has officially parted ways with its ad agency, the Arnell Group, and is moving its advertising in-house, according to market sources.

Neither Karan officials nor Peter Arnell, chairman and chief creative officer of the Arnell Group, could be reached for comment Wednesday. Arnell was instrumental in establishing Karan's image through its innovative advertising, brochures and in-store shops. In addition to the Collection, he created ads for all Karan's lines, including DKNY women's and men's collections, fragrances, pantyhose and bath and body products.

Karan's advertising will reportedly be handled in-house, under the direction of Trey Laird, creative services director, who joined the company last April.

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