Diane von Furstenberg (21 page)

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 going 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.”

Mimmo interviewed several white-glove lawyers “who all had big offices with big paintings, like Picassos, on the walls,” he says. Then he got the idea to contact Roy Cohn.

Cohn had become famous during the Red Scare of the 1950s as counsel to Senator Joseph McCarthy, mouthpiece of the nation’s communist witch hunt. Afterward, in private practice, Cohn worked a favor bank of politics, gangster, and union-boss connections to get results that seemed magical. “I don’t want to know what the law is,” he’d often tell his assistants. “I want to know who the judge is.”

A habitué of Manhattan’s gay netherworld of bars and hook-up joints, Cohn—who would die of AIDS in 1986—didn’t think of himself as homosexual; he was too manly, tough, and aggressive to be queer, no matter whom he liked to bed.

One sunny afternoon Mimmo showed up at Cohn’s East Sixty-Eighth Street townhouse that doubled as his office. The place “was full of beautiful boys,” Mimmo recalls. One of them escorted Mimmo to the rooftop terrace, where Cohn lay spread-eagled on a chaise lounge in a tiny Speedo, the sun glistening off his oiled body.

Blinking against the sun, Mimmo explained the Ferrettis’ case, “that
Diane had breached her contract with us and that she owed us a lot of money. Then I mentioned Carl Rosen and Calvin Klein jeans.”

That got Cohn’s attention. He put on a robe and escorted Mimmo inside to his office. He asked for twenty thousand dollars up front, and 15 percent of any settlement that was reached with Diane. The two men shook hands, and Mimmo left, feeling confident that he’d done the right thing for this father.

Soon afterward Diane received legal papers from Cohn’s office. Ferretti had filed a lawsuit in New York State Supreme Court against Diane and Puritan, seeking $104 million in damages for loss of business and breach of contract. “I will never forget the terror knowing that I had Roy Cohn against me,” Diane recalled in her first memoir. Still, she summoned the courage to telephone Cohn and “threatened him with something so dire [about Ferretti] that the suit was retracted. Maybe I pretended I knew something I didn’t know. I can’t remember.”

Mimmo says Diane knew that his father had substantial sums of money hidden in Swiss bank accounts. If this came out, he could have gone to jail in Italy for hiding assets and avoiding taxes. “My father got scared,” says Mimmo.

Angelo Ferretti ended up bitter and unhappy, dropping dead of complications from diabetes as he exited a Monte Carlo casino in April 1994. Mimmo, though, doesn’t blame Diane for his father’s misery, and they remain friends. “Everyone has some responsibility here—Diane for not warning us that the American market was changing, and my father for being too complacent. He made a lot of money with Diane, and he gambled it all away.”

BY THE END OF 1978
Diane was once again full of hope. She was only thirty-two; she had plenty of time to remake her life and her fortune. “I have a lot down my sleeve,” she told a reporter, revealing her weak command of English idioms after almost a decade in New York. “Maybe I
could
be the next Estée Lauder.”

Never mind that a DVF cosmetics business had already floundered once and that she’d been forced to shut her Madison Avenue shop. She told herself this time would be different.

Diane restructured her company from top to bottom, buying out Richard Conrad, who moved on to run the women’s apparel company Kimberly Knitwear, and replacing her lawyer and accountant, the men she’d relied on but felt “had ill advised me.” As her new president, she hired Sheppard Zinovoy, who’d been a senior vice president of marketing for Calvin Klein. To run her cosmetics division, she approached Gary Savage, a young man who’d worked on fragrances for some of the world’s top fashion houses, including Pierre Cardin, Bill Blass, Lanvin, and Saint Laurent. Diane was impressed by Savage, but before she hired him she put him through her usual test for important executives. He had to have lunch with her mother. Lily “asked me about my background, about my parents and grandparents. She wanted to make sure I was a real mensch,” says Savage.

Afterward, Diane told him, “My mother likes you. Now you have to meet Yolana,” Diane’s psychic. “So I go over to Diane’s apartment, and there’s Yolana,” Savage recalls. “She had the longest nails I’ve ever seen, and she was dressed kind of bohemian. But she was a very nice person. She asked me questions about my career, about how I saw myself fitting in with Diane.”