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Donna Karan is still dreaming big. Despite a highly emotional time for the 66-year-old, who last week stepped down as chief designer of her namesake company to focus on growing her Urban Zen brand and foundation, she managed to keep her sense of humor, perspective and signature streams of consciousness flowing during an hour-long interview about her legacy. The interview took place at Donna Karan International, in the office of Caroline Brown, DKI’s chief executive officer. So nobody stepped out of line, Karan was accompanied by her public relations consultant, Ken Sunshine of Sunshine Sachs, while Brown had her own, Pierre Rougier of PR Consulting. At times the tension between the two sides was palpable, even as all agreed Karan’s decision to exit the firm was painful for everyone involved.

The designer cofounded DKI in 1984 with her late husband, Stephan Weiss, and investors Takihyo Inc. DKI went public in 1996, and in 2001, LVMH Moët Hennessey Louis Vuitton paid $243 million for all outstanding shares in DKI, plus $400 million for Gabrielle Studio Inc., the licensor of the Donna Karan trademarks.

This story first appeared in the July 8, 2015 issue of WWD. Subscribe Today.

The interview gave Karan a chance to discuss her feelings on leaving the company and LVMH’s surprising decision to temporarily suspend her designer collection. She will remain a close adviser to the firm, a long-term gig, although no details have been revealed. She also spoke animatedly about the next chapter in her life — her philanthropy and Urban Zen — and said she’d be amenable to an investor in that brand.

With no shortage of causes and things to keep her busy, Karan is actually finishing up her memoir, which will be published in October by Ballantine Bantam Dell, an imprint of Random House. She said she had to turn in the last chapter by Monday, which is ironic, since the book’s ending just took a dramatic turn.

How are you dealing with the new developments and how are you feeling?

Donna Karan: It’s all happening. There’s the anxiety of telling people. For me, there’s a relief to it. I’ve been holding onto it. I keep on comparing it to a sudden birth or death, whether it be Anne [Klein] or my husband. You never know what is happening when there’s a huge, massive change in your life. My whole life is about that. This is not surprising. To me, it seems like it is what it is. Not that there’s any difference. To the outside world it might appear like that.

Has this desire to leave been growing?

D.K.: I don’t think I’m doing much different than what I was doing. People say to me, How do I do it all? I don’t. It’s very flattering of people to think that I do it all, and I’m only one person. I say to everybody in the company, they’re the people who do it. Peter [Speliopoulos, senior vice president of design, Donna Karan] is leaving as well.

How did the staff react?

D.K.: There were a lot of tears. I don’t think anybody expected it. We looked at it very carefully. We were working on the spring collection. But we decided at this point if we were going to announce it now, doing the spring collection wouldn’t make any sense. Resort is the last collection, and fall. From my point of view, it could have been last fall. I didn’t expect to be here for this fall. I’ve always said, “This is it guys, this is it. I can’t do it all.” Kathleen [Boyes, writer for the company] would always write, “To be continued,” and I would say, “No, say the end,” and they’d say, “No, Donna.”

Is Urban Zen just so much more compelling to you now?

D.K.: It’s not a question of it being compelling. It’s like having another child. It needs attention. The more that I travel, the more that I get away, the balancing of the three [DKNY, Donna Karan and Urban Zen] becomes more difficult. Urban Zen has been my vision for so many years. I’m not getting that much younger. I’ll never be as old as my daughter; I’ll always be younger than her. That’s what I keep telling her. I’m a child at heart. And there’s so much that I want to do. I have this vision that I have been sitting on with my vision board for the past seven years that I want to do this motorcycle diary. I love, love working in Haiti. I love working with cultures around the world. I’m a traveler.

How are your friends reacting to everything going on?

D.K.: I think the people are in shock. It’s been shocking. I would call and say, “You have to come to my last show Barbra [Streisand], it may be my last show, you have to be there.” But I thought it was a better idea if she didn’t come.

Do you love the idea that your last show was such a huge success?

D.K.: I think I was shocked more than anything else. I didn’t think I could pull off one after the year before. So I was surprised by how much everybody loved it and Bridget [Foley] in particular. I knew it was a good collection, but I don’t think I’ve ever done a bad collection. Even though rumor has it, there were a few.

Caroline, why did you decide to pull the plug on the Donna Karan collection?

CAROLINE BROWN: First of all, pulling the plug is definitely not how we would describe it. I’d love to comment first on the reaction from the teams. It’s an emotional moment for our company, of course. One of the strengths Donna has as a leader, is she is a “we” and not an “I.” She’s extremely close to the teams. On the other hand, one of the things they admire about Donna is her diversity. She’s not a singular-focused person. She has so many areas outside this collection that she’s contributed enormously to — philanthropy, Urban Zen, health care, education, Haiti, Parsons [New School Parsons School of Design]. Everybody here knows there are a lot of balls in the air. I think it’s a time where there’s a lot of emotion, and there’s also a lot of looking back with great respect and appreciation. What has Donna built in these years? What is the legacy? The strength of the codes she instilled? It’s a mixed moment. There’s a lot of emotion and a lot of passion for Donna in all of our offices.

Why did you decide to put the collection on hiatus then? Usually the designer collection is the umbrella and sets the tone for a business.

C.B.: Business would be super easy if there was a one-size-fits-all strategy. Companies all have to make their own decisions on how they continue with the staff following the founder. We have a lot of moving pieces in this company today. I would say our company is in a really interesting and exciting moment of evolution. This decision on Donna that we support and we respect, we’ve had many conversations. It’s been a very open dialogue between our teams here, Donna, LVMH. It felt like the right thing for the moment we’re at. For this particular founder and this particular company. Maybe it’s not the moment to turn it around this second. Maybe it’s the moment to live with it, to respect it and to honor it. Brands have very long lives. And brands with strong DNA have very long lives. We see this as a long journey. Let’s focus on some other areas of the business that we’re deeply invested in, in terms of growth, right now, and let’s revisit when the time is right.

Would you ever incorporate the high-end aspect of the collection into DKNY, something similar to the way Marc Jacobs is merging Marc by Marc Jacobs into the Marc Jacobs collection?

C.B.: Donna Karan and DKNY are very distinct collections. However, they share the same core principles that Donna established at the very beginning of the company, always strong but sensual, New York-inspired and modern. These codes will continue to live on in the DKNY business as we evolve the brand. We also know from the strength of the name, there is a clear opportunity to broaden and elevate this offering — and through this DKNY can continue to capture the essence of Donna in many ways.

Is there a possibility that the collection could be relaunched in a couple of years?

C.B.: Right now, what we’re focused on is today. Today we’re focused on celebrating Donna. We’re focused on our gratitude and our appreciation for her enormous contributions. We’re focused on her great partnership that she’s had all these years. I’m very focused right now on what this means as a transition for our teams. When we get to the next phase, we have a long life and we have a strong brand that will live for a long time. We’ll address those at the right moment.

Was there any conversation about selling the Donna Karan business to another company?

C.B.: We’re fully committed to this company and this name. LVMH is fully committed, they’ve had this investment for a long time. We really believe that there’s something really unique here. We’ve been very public talking about its potential and enthusiasm for the future.

Donna, did you ever think of buying it back?

D.K.: Absolutely, from the day we sold it. (Laughter). It’s always hard because it’s your baby. This is your child. How many times are you able to separate from your child? I don’t think a day will go by that you don’t want your child back.

LVMH has been an extraordinary parent company. They respect the house, and if you look at what they accomplish, it’s extraordinary. They’re the number-one mother brand to young designers, to businesses, to everything and I have the highest respect for LVMH and Mr. Arnualt and Pierre-Yves Roussel [chairman and ceo of LVMH Fashion Group]. When LVMH purchased the company, Stephan and I had a strong relationship with Yves Carcelle. I adored him. I walked into his house and there was a Buddha. He’s East meets West, that’s Donna Karan.

Tell me about the book that you’re writing. Is it a tell-all?

D.K.: It is, the way I tell it. It’s certainly a book about my life, born on Seventh Avenue. It is Donna Karan. Who would have ever thought, in their wildest dreams, that literally the last chap- ter is due Monday? I cannot believe it. It comes out on my birthday, Oct. 2. The thing about the book is that I hope to touch people’s lives who realize that Donna Karan is not untouchable. What everybody goes through, I’ve been through. Whether it’s for young designers, or for women who are not happy with their bodies. There’s not a woman I know who isn’t happy about some part of her body.

You finance Urban Zen yourself. In a previous interview, you said you had wished that LVMH would have financed that, too, as part of the Donna Karan company. Are you now glad it was independent?

D.K.: Urban Zen is my baby. I was given this vision of Urban Zen over 15 years ago. It was so clean to me. I had done Donna Karan, I had done DKNY and I felt that my next journey had to be Urban Zen. I had to find the calm in the chaos. I was living in so much chaos. Everything around me was chaotic. I want to make a difference in this world. I want to help. Since Seventh on Sale and Super Saturday, I always thought there was purpose in philanthropy and commerce.

Let’s get back to the business of Donna Karan. What role did you think you played in the evolution of American sportswear?

D.K.: The woman and her body, black, comfort, sensual, day to night, seven easy pieces. It is a uniform. Black, not just for black ties and funerals. Putting stretch in men’s suits. I was the first to put stretch in women’s clothes.

How do you think you might reinvent yourself?

D.K.: The motorcycle diary. I really want to spend a lot of time traveling. My dream is to be on a motorcycle, on the back, and go to places that haven’t been sought out yet and work with the artisans. The thing I love about Haiti the most is Haiti has the health-care aspect, the educational aspect and the preservation of culture aspect. For me, Bali is my inspiration, always has been, always will be. My dream is to build a bamboo village in Haiti. I do believe in Urban Zen living very much. I have a dream for Urban Zen. You walk into the store and there’s cotton, cashmere, candles, CDs, café, all healthy food. You get upstairs and you meditate, do yoga, there’s a conference area. People come together who want to create change in the world. Then you disrobe upstairs and you get a Thai massage, acupuncture. Next door to that is a restaurant and living space upstairs. We don’t have to have a kitchen because you get it from downstairs. There’s a spa upstairs. People like myself are constantly on the go, so I need my acupuncture, I need my massage. I need all these things, and it doesn’t exist.

Have you started this center yet?

D.K.: That’s my dream. If you have enough dreams, you put it out there in the world and dreams come true.

Tell me the five biggest highlights of your career at Donna Karan.

D.K.: Day number one, had I known that it would be the success that it was. I thought it was going to be for my friends and me. I had never even imagined. I think when I went into men’s wear. There’s something about men’s wear that really captures my soul. President Clinton calls me up and says, “Donna, I need a suit for the inauguration.” I said, “What size do you wear?” He said 54-long, and I said no, you’re not, you’re an extra long. I have learned never fight with President Clinton, he’s always right.

My bosses walked in one day and I said, “What do you think of this suit?” They said, “It’s really nice, I really like it.” And I said, “You’ll see it on the runway tomorrow.” That’s how I launched men’s. The third is DKNY, to be able to show dogs, my husband, the children, all down the runway at the same time. When people walked in to see DKNY for the first time, I think they were blown away. Everybody was in white Keds sneakers. There must have been 75 looks, men, women, children, dogs. Everybody was like, “What is going on?” Fourth is the collection stores in London and Madison Avenue.

The fifth highlight is today. It’s a master change. Today is not the end, it’s the beginning of the unknown. Would I have ever dreamed that I would be sitting here talking to you today like this? No. I’m open to dream.
What’s most important to you?

D.K.: My family. My children and grandchildren.

How is your daughter handling this?

D.K.: I told her she’s my mother. I think I’m handling this easier than she is, to be honest with you.

I just read yesterday that you’re on Forbes’ inaugural list of America’s richest self-made women. Your estimated wealth is $450 million, putting you at number 31, tied with Diane von Furstenberg.

D.K.: We are? I think I’ll call her husband [Barry Diller].

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