Diane von Furstenberg

by Gioia Diliberto

  In the 1970s, feminism was joined at the hip with egalitarianism. Diane’s lifestyle represented the kind of extravagance that made many feminists uncomfortable. They thought it unseemly to live as luxuriously as Diane did when so many women were suffering. She resided in splendor in Manhattan and Connecticut. She employed servants. She entertained lavishly. She wore jewels and fur coats.

  Diane’s political convictions, however, were liberal. She followed politics in the news, enjoyed discussing national and world events, and perfected the skills of a political hostess at fund-raisers in her apartment for New York mayor Edward Koch, a Democrat. She relished being close to political power.

  On March 17, 1976, Luis Estévez, the California designer who dressed First Lady Betty Ford, invited Diane to be his date at a White House state dinner in honor of Irish prime minister Liam Cosgrave. While having cocktails in her hotel suite with Estévez before the dinner, Diller called. He wanted to be the one to take her to the White House for the first time. “Too bad, I got there first!” says Estévez.

  Diane entered the East Room in a black satin strapless dress she’d borrowed from Halston that had ties under the bust holding it up. The ties kept slipping, and Diane struggled to hold the dress in place. The party was in full swing, jammed to a standstill with celebrities and dignitaries, the women in ball gowns, the men in black tie.

  Though Diane was not an American citizen and couldn’t vote, she would not be supporting President Gerald Ford in the upcoming election, backing instead his opponent, Jimmy Carter, who had won the Democratic presidential nomination. Still, at the White House dinner she earned a place at the head table, seated on the president’s left. Estévez was seated on Betty Ford’s left, at her table. Diane told Ford that she’d only beaten him out as the Newsweek cover at the last minute. “If I had to be beaten by anyone, I’m glad it was you,” he told her.

  Then he asked Diane to dance. “It was the fox-trot or some old-fashioned dance like that which I absolutely could not do at all,” she recalled in her first autobiography. The president “was a very good dancer, but all I did was trip over his feet and pray the dance would end before my strapless dress fell off.”

  Requiem for a Dress

  Diane’s life had the breakneck quality of a sprint in stilettoes. She was living out a fantasy of money and fame, but she was moving too fast on a base that was nothing more than a teetering spike.

  All art forms are subject to trends. But a good novel, painting, or symphony holds its artistic value, whereas fashion reflects the moment, the collective craving for what’s hot now. Worship of the new means it’s only a matter of time before yesterday’s favorite is passé, before something else takes the top spot. Diane feared someday she’d fall, and when she did, her decline was swift and merciless.

  One hot Sunday morning in June 1977, while reading the papers in bed, Diane saw a spate of ads that made her freeze with dread. Some of the top department stores in New York, including B. Altman, Saks, Macy’s, and Lord & Taylor, had slashed the price of her dresses. Styles that had been selling for $80 were now going for $64, and those at the high end, at $186, were being offered at $93. The ads avoided spelling out her name but references to “that exciting designer who brought you that famous wrap” left nothing to speculation. She read and reread the ads in the pink satin plushness of her bedroom, and each time the words and numbers shocked. This was disaster. Her business had grown too big too fast. She’d started with three little outfits and by 1977 was selling twenty-five thousand dresses a week, an explosion that fueled her lucrative licenses.

  The papers the next day held more bad news. Bonwit Teller and Bloomingdale’s had also slashed the price of her dresses. WWD followed with a front-page story. Under a huge headline, VON FURSTENBERG LINE MARKED DOWN BY SIX N.Y. STORES, the story began:

  Diane von Furstenberg dresses, not named as such but thinly disguised in advertising copy, went on sale Sunday. . . . Retailers were reluctant to discuss the genesis of the decision to break prices on the same day. . . . But one store official referred to it as “an eyebrow-raising coincidence” which could create a “sticky” situation.

  What is behind the slowdown in sales, some believe, is the thought that the classic von Furstenberg wrap dress may have run out of gas. . . . The lack of diversification may have finally come back to haunt the company. Criticism was voiced that von Furstenberg may have stayed on top of this dress too long; retailers had earlier indicated this lack of diversity was a major danger point for the firm, but it evidently may be coming to a head sooner than anticipated.

  It was also pointed out that the von Furstenberg lines have been knocked off, imitated (in some cases with the same basic fabric and print styling) but with enough difference to make the dresses a bit more interesting so women wouldn’t see themselves coming and going. This has hurt von Furstenberg sales.

  WWD covered the fashion business, so reporting on sales was no surprise, but what startled Seventh Avenue insiders was the prominent play the newspaper had given the story. For all the pleasure publisher John Fairchild took in his power to make or break designers, no one could recall when he had singled out one designer for a piece about a season-end clearance, let alone in a banner headline on the front page.

  At one time Fairchild had promoted Diane’s career. WWD had written about Diane frequently in stories and columns and, aside from an occasional dis, had mostly favorably reviewed her collections. Now she was Fairchild’s latest victim.

  And yet Diane couldn’t blame the publisher. The story was accurate. She and Dick Conrad knew that sales had slowed. “The handwriting was on the wall in January,” says Conrad. “For the first time since we’d started the business in April 1972, our bookings were down.”

  “I was traveling around the country, and I could see that the stores were [saturated] with wrap dresses. I was worried,” says Diane.

  Still, she was unable or unwilling to respond to what was happening. “She was bringing in the bacon, but she wasn’t keeping track of where it was going,” says one observer. “She’s not savvy about money and numbers. It was naïve to think wrap-dress sales would continue at that pace. For someone who supposedly understands women so well, didn’t she realize women wouldn’t need more than one or two wrap dresses? She was spending all her energy on keeping up with demand. She never stepped back and said, ‘How long can this continue?’ Well, the market answered the question for her.”

  WWD’s story killed the wrap as effectively as if Fairchild himself had slashed the dresses with a knife. Within days Diane von Furstenberg dresses went on sale in every city in the nation. Orders for new dresses screeched to a halt. Overnight, Diane found herself stuck with four million dollars in dead inventory. (Conrad says he was not taken by surprise by the sudden markdowns, that he had offered the New York stores discounts, and that he suggested they reduce the price of the dresses 25 percent.) Diane’s company was close to bankruptcy, and she feared she’d lose her apartment and Cloudwalk. She concluded that the men in her professional life—her accountant, her lawyer, and her business partner—had given her bad advice. When the wrap became an instant sensation in 1974, and money was pouring in from practically every store in America “that had four walls and a ceiling,” as Diane wrote, her advisors embraced the runaway growth. Her instincts had told her to build slowly, cautiously, but she’d been swayed by the men around her. Something in the male ego, she decided, impelled them to charge ahead. Men were such fools, such bumblers—les pauvres, her mother had called them.

  The terrible paradox, Diane knew, was that women still loved her dresses, still wore them constantly. In desperation, the partners decided to produce some dresses in solid colors, and they turned to the domestic textile firm Burlington. (As brilliant as Ferretti was with printed jersey, “he could not make a clean piece of solid jersey fabric,” says Conrad.) But the line of dresses in solid colors flopped.

  Though Diane’s printed wraps were languishing on department store racks, t
hey remained hot sellers on the street. In recent months, Diane’s warehouse had been broken into several times. One gang of thieves backed a truck up to the warehouse in the middle of the night, cut a hole in the wall, and made off with twenty thousand dresses.

  After that, Dick Conrad hired a childhood friend who had a license to carry a gun to patrol the warehouse. “Diane hates guns, and when she found out about it, she said I had to fire him. But I wouldn’t do it; he needed the job. So Diane fired him,” Conrad recalls.

  By this time, Conrad and Diane were barely speaking. They’d created something out of nothing and grown rich together. They’d become so successful, they started to feel they could do anything. Diane recalls that Conrad even “came in one morning toward the end and said he was going to run for president!” She suspected he’d been drinking and turned wildly grandiose. Still, it worried her, and she called her lawyer. “I think we have a problem,” she told him. There wasn’t much the lawyer could do.

  The incident was only one symptom of the flakiness that had enveloped the studio. “It was a House of Eurotrash,” recalls DeBare Saunders, who oversaw Diane’s licenses and designed her jewelry collection. “Diane employed a lot people who were friends and playmates of hers and Egon’s. They’d come to work or not come to work. As nice as some of these people were, I kept firing them because they’d come in stoned or spend three hours having lunch.”

  The office was chaotic, plagued by disorganization and theft, says Saunders. Diane paid him well, but he found her difficult to work with, very combative and argumentative. “I was twenty-two years old. Only my EST training,” the controversial self-awareness program founded by Werner Erhard, “gave me the strength to stand up to her,” he says.

  After several instances when Saunders claims Diane denied that she’d approved items that he had ordered, Saunders began keeping a logbook of all his projects and expenditures. He asked Diane to sign and date every authorized item.

  “What happened to [Diane] is classic,” says Barry Diller. “She built up a huge business without much talent on the business side, and so it was inevitable. . . . The channels got clogged, backed up; she didn’t have enough capital, and she was squeezed. It’s a common story of an undercapitalized company growing faster than its brains and experience and getting caught.”

  What Diane should have done, says Diller, is recognize the risk when her business exploded in the mid-seventies, and plan for it by shaving inventory down. Now it was too late. Diane knew that in order to secure her financial future she had to do the unthinkable—sell her dress business. Still, every time she walked into the showroom, the dazzle of color on the racks and shelves extending from floor to ceiling caused a catch in her throat. Her dresses! She couldn’t imagine life without them.

  “I was just glad there was a customer” to take them off her hands, says Diller.

  His name was Carl Rosen. A short fireplug of a man with the temperament of a bulldog and the decadent tastes of a French king, Rosen owned Puritan Fashion, the world’s largest low-priced clothing manufacturer. Seventh Avenue insiders liked to sneer that Puritan was famous for churning out “dresses for the masses with fat asses.” Even the company’s name was a joke: Rosen routinely supplied his best customers with hookers and treated them to debauched parties in Las Vegas. Puritan’s salesmen were notoriously unfaithful to their wives; the company’s divorce rate was stratospheric.

  Rosen kept his mistress, the mother of one of his three daughters, in a lavish Park Avenue apartment, while he shared a duplex on Central Park South with his wife. He also owned homes in Miami Beach, Massachusetts, and Palm Springs, a stable of racehorses, and a gold Rolls-Royce with a royal crest that supposedly had once belonged to England’s queen mother.

  Rosen’s office sat at Thirty-Eighth and Broadway, a short block from Diane’s Seventh Avenue showroom but a world away in aesthetics. Seventh Avenue meant class: pricey, well-made, stylish. Broadway meant mass: cheap, flimsy, vulgar. In Rosen’s office, racing trophies jammed the bookshelves and photographs of horses in the winner’s circle hung on the walls in silver frames. Rosen had a craggy, tanned face and abundant aluminum-colored hair slicked back with brilliantine. He wore bespoke suits; diamonds winked from the French cuffs of his shirts. An entourage of sycophants trailed him wherever he went, which often was to the helipad atop the Pan Am Building. “We took helicopters everywhere—to the airport, the Hamptons, the track,” recalls Lee Mellis, Puritan’s chief financial officer. At the racetrack, Rosen bet so heavily that he had an employee trail him with a suitcase full of cash.

  Puritan had been started by Rosen’s father, Arthur, in 1912, but Carl made the company rich by exploiting trends. In the fifties, when Paris fashion was still the last word on style, Rosen paid a commission to a roster of couture houses, including Lanvin, Givenchy, Cardin, Patou, and Dior, for use of their names and knocked off their clothes for middle-class Americans. He also produced a line of clothing by silent film star Gloria Swanson, who’d had a smash comeback in Sunset Boulevard. At the height of the British music invasion in the sixties, he sold Beatles merchandise. As the seventies dawned, Rosen became convinced that Puritan should move out of schlock and into upscale designer apparel, especially clothes attached to big names. He’d done well with a Chris Evert line of sports clothes, and he hit the jackpot with a license to manufacture and market Calvin Klein jeans. “Designers were becoming stars. My dad knew this was the future of the business,” says Andrew Rosen, CEO of the apparel company Theory, who got his start working for his father. “He wouldn’t have taken a long time deciding he wanted to buy Diane’s business. He knew dresses better than anyone.”

  When Rosen heard that Diane was in trouble, “we approached her,” says Mellis. “We were set on picking up designers. We’d already made an attempt to get Ralph Lauren and Betsey Johnson. We thought we could duplicate the success we’d had with Calvin Klein with Diane.”

  Diane’s business collapsed during a period when she and Diller were romantically involved, and he took charge of the negotiations with Carl Rosen. “It was over Christmas, and we were in the country at Cloudwalk for a week, and almost every day we had to drive into New York and back for a meeting with him,” says Diller. Rosen “was very tough, and I was tough.” At one point, Diller recalls, “I pushed too far, and [Rosen] said, ‘It’s over!’ Then we put [the deal] back together again. This happened twice. It was very difficult, but Diane had to do it. She had no choice.”

  In the end, Rosen sat in Diane’s New York living room in one of her marshmallowy satin chairs, a cigarette between the broad manicured fingers of his right hand. A scrim of smoke mixed with the flowery scent of Fracas, a heavy French women’s perfume that Rosen always wore, giving him the whiff of an expensive whore.

  Mostly, though, he smelled like money. Flicking ash from his cigarette into an ashtray, he sized Diane up with two intent black eyes and smiled broadly. He was a sucker for a beautiful woman, even one who wanted to best him in a business deal.

  In the end, Rosen bought Diane’s entire inventory of dresses, which he unloaded at a steep discount, mostly in South Korea. He also gave her a minimum guarantee of one million dollars a year for her consulting and design services, plus a percentage on royalties of dresses Rosen would produce under Diane’s name.

  Diane hadn’t sold her soul, just her dresses. She still had her cosmetics line and her other licenses. Why, then, did she feel so empty? After signing the agreement, she walked out into the boisterous New York afternoon and thought of her mother, as she always did during times of distress. She “was never a victim, never,” Diane says. Lily Nahmias was a survivor, and Diane would be one, too.

  DIANE’S EMPLOYEES TOOK THE NEWS badly. “Suddenly, overnight, it was over,” says Jaine O’Neil. “Carl Rosen came to tell us what was going on, and I remember knowing, ‘This is it. Our days are numbered.’ He was Broadway, the wrong side of the fashion tracks. One by one we were told that now it was Rosen’s business, so he was goin
g to use his people.” O’Neil and the rest of the staff were out of jobs.

  No one was more distressed than Angelo Ferretti. As Diane’s business had grown, he’d canceled most of his other contracts. Diane had also insisted that he not sell the jersey fabric used for her dresses to other designers, and Ferretti had agreed. “But he couldn’t help himself” from reneging on the promise when the opportunity arose, Conrad says. One day in the early seventies, Ferretti met Oscar de la Renta in Monte Carlo and offered to sell the designer the wrap-dress jersey. De la Renta declined the offer once Diller and Conrad apprised him of Diane’s agreement with the Italian.

  By 1977, Ferretti’s employees at the Montevarchi factory worked almost exclusively for Diane. She pressed Rosen to continue with Ferretti, and Rosen made the journey to Europe to meet him. They hit the casinos in Monte Carlo together, two flamboyant operators who understood each other only in the lingua franca of gambling. “Diane owed us a lot of money, and we were very worried,” says Mimmo Ferretti.

  As it turned out, Rosen had his DVF line made in Asia. Ferretti’s orders from DVF screeched to a halt. “We sat in front of the fax, like we always did, but the orders didn’t come. It was shocking, really shocking,” says Mimmo.

  His father was desperate, at risk of losing everything. He started paying the workers with his own money, and he sent Mimmo to New York to find a solution, to perhaps work out an arrangement with Puritan. Mimmo moved into a suite at Olympic Tower, “where all the Eurotrash stayed,” he says, and plotted his next move. “Now I’m in New York, and I’m able to look at the situation in a shark-like, New York business way, not a [laid-back] Italian way, and I know that I have to sue Diane,” says Mimmo. “She owes my father a lot of money, and then there’s the issue of breach of contract.”