Can Calvin Klein Escape? : He Built an Empire on Raunch and Elegance. Then, Overpriced Jeans and Junk-Bond Debt Pushed It to the Edge. But Look Out, Here Comes His Spring Collection.

<i> Linda Grant, a contributing editor to this magazine, wrote about the Salomon Brothers scandal last week. </i>

AS CALVIN KLEIN BOUNDS UP THE STEPS TO THE runway ringed by a dozen perfect models swathed in white, the adulation of San Francisco’s most glamorous clotheshounds is palpable in I. Magnin’s Klein boutique. They have been treated to the West Coast premiere of Klein’s luxe spring collection, a tour de force of grace and sensuality from an icon of American fashion.

The ladies lunch on marinated chicken with asparagus in a room decorated entirely in black and white. Then lights dim, spots brighten and leggy mannequins with loosely swinging hair stride down the runway to haunting choral music. Each pauses in haughty pose, sashays back and forth and exits as another captures all eyes. Spontaneous “oohhs” followed by bursts of applause greet favored outfits as the women scribble in their programs.

Garbed in tones of smoky blue-gray, Klein shows some signs of fatigue from the incessant demands of his celebrity. A six-footer, his casually styled brown hair thinning on top, the designer is wiry, almost bony, his dark eyes slightly sunken.


After the show, those eyes flash to life as the women encircle him, lavish praise and reach for their charge cards to purchase his lace bodysuits, cashmere sweaters, silk jackets and revealing evening gowns. The night before, a corps of socialites feted him at the always fashionable restaurant Stars.

“People are fascinated by Calvin’s lifestyle,” says Rose Marie Bravo, Magnin’s chief executive and hostess of the show. “They want to know what makes him so great, a little on the edge, outrageous. He’s a star, a man of mystique.”

Kalman Ruttenstein, fashion director for Bloomingdale’s, recalls a store opening on the Philadelphia Main Line, where Bill Blass, Donna Karan, Louis Dell’Olio and Diane von Furstenberg appeared. It was to Klein that the women flocked. “Our customers go nuts for Calvin,” he says. “I have to hide him in a sitting room to give him a break.”

There is a fit between the appeal of the clothing and the veneration of the designer, which has held steady and strong through the myriad phases of his career. A man of sophistication and creativity, his once-hedonistic ways brought him close to self-destruction. Yet, as he approaches 50, Klein has reinvented himself as a country gentleman living in splendid insulation, complete with trophy wife. Through the changes, he has held fast an aura of mystery, an image tinged with ambiguity, even as the public scrutinizes his every move. Klein’s keep-’em-guessing persona feeds the hoopla that is the currency of the fashion world.

Central to the Klein mystique is a curious paradox: The multimillionaire creator of clothing and fragrances--so well known that some think he’s a brand, not a person--has a dual signature. The garments brought forth by his studio are typically clean, streamlined and easygoing, yet his market position has been achieved on the visceral strength of sexually provocative ads. The raunch of his spectacular campaigns belies the refined simplicity of his clothing.

Wander into the sleek glass-and-wood Klein boutique in Costa Mesa’s South Coast Plaza, one of five in affluent enclaves across the country, and you’ll be hard-pressed to find the motorcycle leather worn by the aggressively hip, half-naked libertines in his ads. Rather, there are jeans, preppy shirts and crew-neck sweaters in subdued colors at premium prices and skimpy cocktail dresses for $1,000 a pop.


Ever since Klein put 15-year-old temptress Brooke Shields on television cooing, “You know what comes between me and my Calvins? Nothing,” he has turned consumers on with daring--some call them pornographic--ads for generic products such as jeans, underwear and perfume. At the same time, his couture collections have been admired for their classic mood and simplicity.

Dawn Mello, creative director of Gucci in Milan, sums up his contribution: “Calvin is among the top designers not only in the United States but also on the international scene. He is known for American sportswear, but his influence is far broader. He represents a style that is unique: simple, uncomplicated, devoid of gimmicks, understated, refined. He designs the way many women want to dress.”

The paradox was cast in bold relief last fall, when his new spring line won raves for classic beauty hard on the heels of a notorious promotional campaign for his sportswear. Klein’s 116-page advertising supplement in Vanity Fair’s October issue wordlessly evoked heated fantasies about rock ‘n’ roll, motorcycles and beautiful young bodies.

When the spring collection debuted in November, however, response focused on the sophistication of the line. It delighted observers exhausted by 1980s gimcrackery, an era when women “looked like walking chandeliers,” says Alan G. Millstein, editor of Fashion Network Report. Millstein refers above all to the poufy confections of Parisian couturier Christian Lacroix, whose ‘80s eveningwear is emblematic of that era’s excesses.

Klein believes the important elements for spring are sheer fabrics, a versatile cardigan jacket and the mixing of patterns. Length is not an issue, he claims, and he backs up his position with an eclectic display of mid-calf, ankle-length and above-the-knee skirts. His opaque fabrics in natural sand colors wrap around bodies in surplice tops. Long skirts in supple silk are shaped close to the body through the hip, then eased into a flair that allows women to move around easily. Some have sexy slits cut high up the leg. Sweaters, dresses and jackets expose decolletage in deep V cuts, and clingy fabrics give new meaning to the word skintight.

Women’s Wear Daily declared Klein’s spring collection one of the four best, along with those of Donna Karan, Ralph Lauren and Marc Jacobs for Perry Ellis. The Times’ fashion editor Mary Rourke wrote, “His clear, single-minded point of view set him apart. He reached back 20 years to his own beginning and revived the stark, yet sensual, styling that earned him the ‘Mr. Clean’ badge years ago.”


Says Joan Kaner, senior vice president of Neiman Marcus in New York: “Calvin’s long skirts work because he shows leg and uses sheer fabrics. They feel casual and free instead of dowdy. His pantsuits are wonderful, easy pieces. They’re designed for someone who doesn’t want to clutter life up with gimmicks.”

The raves of fashion mavens are familiar to Klein. Over the long haul, unfortunately, these successful top-of-the-line clothes have accounted for only 10% of sales at Calvin Klein Inc., the closely held company Klein owns with a partner, Barry K. Schwartz. Klein’s empire is built upon his once-dominant casual clothes, the division of his company that is now the weakest. Sportswear, which made Klein a household name, has been faltering under the pressures of recession, competition and, some theorize, the changing wardrobes of aging baby boomers. From a high of $240 million in 1987, overall sales slid nearly 20% to $197 million in 1990. The sickening erosion continued during the first three quarters of 1991, when they were off another $20 million from the previous nine months’ anemic results.

Profits have been savaged. Klein lost money in 1986, ’88 and ‘90, and managed to eke out a gain of $2.7 million in the first three quarters of last year. Only the steady growth in royalties from licensed products such as underwear, perfume (primarily Obsession and Eternity), shoes, sewing patterns, sleepwear, hosiery, furs, coats, swimwear and socks to about $21 million last year has provided the buoyancy to keep Klein’s company afloat. Licensees manufacture items with the designer’s label, paying anywhere from 5% to 10% of sales for the privilege.

Klein is not alone in the doldrums. Dozens of apparel manufacturers have filed for bankruptcy. The department stores they rely on to showcase their ideas are struggling under mountainous debt, with the vaunted Federated Department Stores (Bloomingdale’s, Abraham & Strauss, Rich’s) just emerging from bankruptcy and the Macy’s empire (I. Magnin, Bullock’s) filing last month for protection from creditors in a Chapter 11 reorganization. Says Millstein, “The ‘90s will be the final Armageddon for conventional and department stores. This is a decade of the discounter. Price is now more important than fashion.”

As the fashion industry girds itself for a more austere era, Klein faces the challenge of reinventing his company for the ‘90s. Vexed by business problems and irritated by reports of those woes in the press, Klein refused to be interviewed for this story. But when Barbara Walters of ABC’s “20/20” asked him in December why his sportswear division wasn’t doing well, he didn’t mention market research or acknowledge that products similar to his can be bought at the Gap and J. Crew for far less. He responded as only a star could: “I think because it needs my personal touch more.”

During a decade of schmoozing with stars idolized by kids who wear jeans, Klein’s touch was unerringly on the pulse of American youth. But as the designer settles into sedate midlife and devotes himself to cocooning, the numbers suggest that Klein has lost his ability to make young pulses race.


THE CALVIN KLEIN TOUCH WAS NURTURED IN THE BRONX DURING THE ‘40S AND’50s, where he grew up around the corner from Ralph Lifshitz, now archrival Ralph Lauren. Young Calvin attended Public School 80 on Mosholu Parkway with his best chum, Barry Schwartz. Calvin’s dad ran a grocery store in Harlem, and his stay-at-home mom, along with his grandmother, was passionate about beautiful clothes. Often Calvin would accompany her on forays to Loehmann’s, one of the first stylish discounters of designer labels. He went on to graduate in 1962 from Manhattan’s Fashion Institute of Technology.

Klein’s first job was to create sketches for a coat and suit manufacturer. He left two years later, kicked around in several different jobs, including working as a copy boy at Women’s Wear Daily, then borrowed $10,000 from Schwartz, now his partner, to establish Calvin Klein Inc. In early 1968, the two opened a littleshowroom in the York Hotel on 7th Avenue, the heart of the fashion district.

With Schwartz’s start-up money, Klein created his first collection of youthful, understated coats and dresses. By accident, a Bonwit Teller executive stopped in at Klein’s showroom. He was so impressed by what he saw that he asked Klein to make an appointment with Bonwit’s powerful fashion chief, Mildred Custin.

What happened next is legend on Fashion Avenue: A few days later the perfectionist Klein pushed his rack of samples 20 blocks to Bonwit’s, despite a broken wheel, to ensure that the clothes wouldn’t be wrinkled from lying on a taxi seat. Custin snapped up $50,000 worth. In one interview, Klein recalled, “Everything shipped to Bonwit’s sold instantly and word traveled fast. Everyone in the country was calling, and there was no way I could supply everyone. . . . Those were great days.”

American women, throwing off the chains of fashion enslavement as the feminist movement gained momentum, welcomed Klein’s youthful, uncluttered lines. In 1973 Klein won the first of three consecutive American Fashion Critics’ Coty awards, which cited his “nonconformist, classic” styles. He was inducted into the organization’s Hall of Fame in 1975.

During this era, the young husband and father who had once designed polyester clothes shed those decidedly middle-class trappings, woke up and smelled the stardom. He divorced his wife, Jayne, and moved to the East Side, spending his free time hanging out at gay bars with celebrities--among them Andy Warhol and Steve Rubell of the infamous disco Studio 54--and vacationing in gay enclaves such as Fire Island Pines, N.Y., and Key West, Fla. He became addicted to Valium and alcohol.


It was at 4 a.m. in Studio 54, in fact, that Klein first discussed moving into designer denim with an executive of apparel manufacturer Puritan Fashions. A leading trendy himself, Klein again demonstrated his ability to pick up on fashion vibes by sprucing up the most American of all casual styles: the blue jean. His idea was simple. Klein slapped his name on the back pockets of refitted, well-cut jeans, sold them in the sportswear sections of upscale department stores such as Bullock’s and I. Magnin, and charged a hefty 50% or so premium over Levi Strauss, Lee and Wrangler. Form-fitting “Calvins,” the first denims to sport the name of a major 7th Avenue figure, captured the American moment. The jeans sold an astonishing 200,000 pairs the first week they hit the market in 1978.

To keep the bubble expanding, he hit on the joy of sex, choosing as his spokesmodel the sweet, seductive Brooke Shields. “Jeans,” he said, to the chagrin of those more concerned with comfort and durability, “are about sex.”

The subject fascinated him, and in a 1984 interview with Playboy he conceded he had sampled widely in the interim: “Anything I’ve wanted to do, I’ve done. Anyone I’ve wanted to be with, I’ve had.” He maintained that “having sex with three people or five people isn’t really as great as having sex with someone you’re really in love with,” but mused on the other hand that anonymous sex was pretty great too: “My best sex has been with people who didn’t know who I was.” Klein’s first, wildly successful fragrance, introduced to great fanfare in 1985, characterized his lifestyle; he called it Obsession.

Not surprisingly, this highly publicized life-in-the-fast-lane existence led to whispers that Klein is gay or bisexual. He is noncommittal on that question, but has been dogged by AIDS rumors ever since he checked into Manhattan’s Lenox Hill Hospital with viral meningitis in 1982. He denies them, and so far no convincing evidence has surfaced that he is ill. The fashion industry has been traumatized by the epidemic, losing such stars as Halston and Perry Ellis. Bankers and insurers now routinely require HIV tests of key fashion executives before they issue loans and policies.

Androgeny was the next big thing. Cruising the clubs in the early ‘80s, Klein identified a growing unisex trend. The result was a lucrative line of men’s-style briefs and T-shirt underwear for women. Once again, the merchandise was promoted in sexy ads, and it wasn’t long before jazzy men’s underwear, heralded by a photographic portrait of a tanned, rippling brief-clad model, hit the stores. Crazed fans broke the glass in dozens of New York bus-stop shelters to steal the poster; Klein installed a huge reproduction on a Times Square billboard so he could view it from his car traveling to work.

Through the heady years Klein and Schwartz paid themselves handsomely: $4 million each in 1977, $8.5 million in 1981, $12 million in 1984, according to various estimates. Yet when Calvins were at the height of their popularity in 1983, racking up worldwide retail sales of about $400 million, the seeds of Klein’s current problems were sown. The jeans were licensed to Puritan, whose owner died that year. Unhappy with the new management, Klein and Schwartz took over the company at a cost of $66 million. Their timing was horrendous. The jeans market started to nose dive shortly thereafter, as aging consumers switched to looser-fitting sportswear such as sweats and tennis warmups.

Bankers who had funded the Puritan takeover grew nervous, so Klein and Schwartz decided to refinance the debt in 1985. Schwartz’s good friend Barry Diller, the film-industry potentate, introduced him to Drexel Burnham Lambert junk-bond czar Michael Milken, who issued $80 million in high-interest Klein bonds.


Like many companies that took on expensive debt in the ‘80s, Calvin Klein Inc. has struggled to meet interest payments, especially as the recession cut into sales. Although Schwartz and Klein own their company, the issuance of debt requires them to file financial data with the Securities and Exchange Commission. Those filings disclose that as of Sept. 28, long-term debt totaled $54.6 million. A principal payment of $15.3 million is due this year, and the same amount next year--heavy burdens indeed for a company barely able to turn a profit.

FROM HIS UNFUSSY 10TH-FLOOR OFFICE ON WEST 39TH STREET, KLEIN LAST summer devised a counterattack against the designers who have usurped his dominance in designer jeans--Guess, Girbaud and Karan’s DKNY. Those lines are prospering from the hesitation of many young people to wear the same label that once bedecked the derrieres of their parents.

For his first act, Klein reached back to his tried-and-true formula of voluptuous promotion. But to score, he had to design something more shocking than before. After all, it had been three years since he told Vogue, speaking of his ads, “I’ve done everything I could do in a provocative sense without being arrested.”

Provocation, indeed. A high-gloss, seemingly endless insert in last October’s Vanity Fair triggered a chorus of righteous indignation from critics, including apparel professionals, who denounced it as pornographic. Meanwhile, collectors quickly bid its market value up to about $30.

The ad supplement depicts a rock concert, the physical, playful type of event where jeans are customary attire. “Denim and skin, that’s what rock concerts are about,” Klein told WWD. The collection of sexually ambiguous images features male band members in jeans and leather jackets fondling nude, semi-nude and fully clad women, then undressing themselves and their dates. Included in the narrative are sculpted poses of male and female limbs entwined, two partially dressed men in bed, and a hunk in a shower engaging in what some interpret as masturbation.

Shot in black and white by Bruce Weber, the photographer who produces Klein’s fragrance ads, and starring sultry ingenue actress Carre Otis, the supplement is defended by its instigator as “a fantasy, something young, that’s sexy, that’s provocative.” He says it’s about jeans, and apparently that message reached its target, because Bloomie’s Ruttenstein claims that sales of Klein’s jeans jumped 30% the following month. Consumer surveys by Video Storyboard Tests rank Klein’s fragrance and jean ads the most popular print campaigns four of the last five years.


On the other hand, some professionals were underwhelmed. “The approach is so tired, so old,” moaned a copywriter for J. Walter Thompson. Shoe tycoon Kenneth Cole mocked it in a recent ad: “We briefly considered running an 8 page ad with half-naked models, shot by a famous photographer in some exotic location.”

Current Calvin Klein fragrance ads frame male and female bodies in striking poses. On behalf of Obsession, a naked man and woman stand facing on a swing, their swaying bodies pressed together from the waist down. The effect is a gorgeous Y-shaped sculpture that suggests ecstasy and love.

Klein’s campaigns have been recognized as avant-garde and artistic as well as scandalous. “Klein’s done a fabulous job in consumer goods,” maintains Sidney Levy, chairman of Northwestern University’s graduate marketing department. “He is one of those leading-edge people who presses at the boundaries of what is acceptable. His ads violate taboos, they give us vivid looks at things we are not supposed to see. He shows nudity, sensuality and intimacy as something human, real, desirable.”

For all the power of his promotions aimed at youth, Klein faces problems in the stores, where his sportswear is priced beyond the reach of most young budgets. American retailers, especially big department stores, group merchandise around price, not their look. Price levels include “designer” at the high end; “bridge” or “second collection” below, and “sportswear.”

Paradoxically, Klein has asked stores to upgrade his sportswear from lower-priced departments--where young people tend to shop--into the pricier bridge level. In other words, despite a sluggish retail environment, Klein is apparently playing to a smaller, tonier set indifferent to the appeal of rock ‘n’ roll. Although his minimalism succeeds brilliantly at the top, some retailers complain that the simplicity of his sportswear makes it tough to justify the high prices.

Meanwhile, the Gap, whose sales have catapulted the company into third place in sportswear after Levi Strauss and Liz Claiborne, exerts heavy competition from below. Klein’s as yet unmet challenge is to convince consumers that his jeans are worth $20 more than theirs.


Says a top apparel executive, who asked not to be identified, “People won’t pay more just because of the label. I’m afraid it’s going to kill Calvin to go to market where the air is so thin.”

PRESSURE IS UNYIELDING IN A designer’s life. As many as six times a year, his or her creativity is judged as critics and customers pore over the latest creations. And the greater the success, the higher the expectations.

John Fairchild, the influential publisher of Women’s Wear Daily, points out in his book “Chic Savages” that designers live a precarious existence. Rich can become poor overnight, because designers subsidize their extravagant lifestyles by licensing their names to increasing numbers of products. Always lurking is the danger that suddenly, inexplicably, their names will lose allure, and licensees will jump ship. “Balenciaga,” Fairchild writes, referring to the great Spanish designer, “ended his days with little money. Christian Dior and Coco Chanel, after their enormous commercial successes, did not leave fortunes.”

The mounting pressure got to Klein in the ‘80s, when he grew increasingly reliant on vodka and Valium. Gucci’s Mello recalls the courage with which he faced his problem when he checked into a Minnesota rehabilitation center, Hazelden, for 31 days. “Many people would have swept the problem under the rug. Calvin called his friends, and told us what was happening. We knew what it took for him to make those phone calls. He needed our support, and the entire industry was behind him.”

Klein called his Hazelden stay the “best thing I’ve ever done in my life.” He told Walters, “I always had to be in control, and I always had to do everything myself. And I grew up believing that I’m the center of the universe and I don’t need anyone’s help. Well, the truth is we all need help, and when I finally realized that I had to go for help and that I couldn’t do all this myself, my life started changing.”

In a remarkable turnabout in the late ‘80s, Klein renounced nightclubs, married Kelly Rector, a design assistant 15 years his junior, and kicked his addictions. He celebrated his new stability with a fragrance called Eternity, which, in a departure from Obsession’s weighty passion, projected a lighter, more beatific aura.


A Connecticut blueblood at home with horses, Kelly is credited with calming the former roustabout and introducing him to an aristocratic lifestyle. And amid Klein Inc.’s financial woes, the couple purchased a $7-million townhouse on East 76th Street and spent another $6 million-plus on a weekend retreat in an East Hampton enclave.

In recent months, Vogue and W magazines have splashed the Kleins’ pictures over their pages, detailing the impeccable renovation of their hideaway, a 19th-Century beachhouse set back from the road by a long, graveled driveway. Kelly rides horses and Calvin paddles a canoe on nearby Georgica Pond. His fragrance for the ‘90s? It’s called Escape.

“Calvin’s life,” says designer Donna Karan, “seems to be in good balance. I would say he’s very happy. He continues to grow, and is committed to both his family and his work. It’s an extraordinary accomplishment.”

Klein’s sobriety is right in step with the times. The nation has, for now anyway, turned its back on hard drinking, casual sex, frilly clothes. The back-to-basics mood of the country is an invitation for Klein to express his smooth, clean vision, a winning sensibility evident in his spring collection.

The times, however, also favor value over cachet. Klein, a survivor and innovator, has prevailed in a notoriously fickle and demanding business for 25 years. But the now-serene designer’s hardest sell is still ahead.