The Latest Calvin

From the Bronx to Eternity.

By Michael Gross
Originally published in the August 8, 1988 issue of New York Magazine

THE FIRST SIGN THAT CALVIN KLEIN HAD ARRIVED was the pair of bulky men moving down the escalator onto the main floor of Saks Fifth Avenue. Guns bulged under their blazers as they eyed the lunchtime crowd-about 400 people who’d come to see the fashion designer at his first public appearance since he’d spent the month of May in the Hazelden Rehabilitation Program, a Minnesota drug-and-alcohol clinic. Klein’s partner, Barry K. Schwartz, and dozens of employees of Calvin Klein Industries milled nervously around a gray marble platform on which brushed-steel letters spelled out ETERNITY, the name of the perfume Klein had come to introduce.

He rode down the escalator moments later, dressed in a tan bespoke suit, red tie, and penny loafers. Though pink from the sun, Klein’s face was drawn. He spoke briefly (“I hope I get a chance to meet all of you”), then stepped behind a drafting table, picked up a pen, and began signing autographs.

Behind a rope, fourteen reporters strained to hear what he said to his fans. Though they’d been told no questions would be answered, some shouted them anyway, asking about his problems with vodka and Valium. Finally, Klein turned. “I feel fine,” he said. “Good. Just really good.” Then he put his hand up beside his head like Ronald Reagan does when he’s ignoring Sam Donaldson. “I have a problem with my ear,” he said, returning to his autographs.

The Saks and Klein people wanted only to talk about how well Eternity was selling, so the reporters quickly got bored. “Why are we here?” Newsday asked.

Forty minutes later, as the fans thinned out, Marilyn Berkery, a UPI reporter, joined the line of autograph seekers, still hoping to get in a question. As she reached Klein, his P.R. man, Paul Wilmot, blocked her way, but Berkery pushed past and approached the designer. “I’m just here for signing,” he said, looking befuddled.

“What about the new morality?” Berkery pressed.

“I’d need a press conference to do that one,” Klein said.

“In and out fast,” said Wilmot, stepping in to lead Klein away.

“In and out,” Klein repeated, smiling thinly as he left.

* * *

THAT JUNE MONDAY, AS HIS LABEL PASSED ITS twentieth anniversary, Calvin Klein embarked on the latest leg of an extraordinary odyssey-a sort of one-man pilgrimage through the social history of modern America. In his journey from P.S. 80 on Mosholu Parkway in the Bronx to a summer place on Georgica Pond in East Hampton, Klein, 45, has ridden America’s bucking Zeitgeist with remarkable skill, using his instinct for sensing-and reflecting-new mores to sell products from shoes to shampoo. While almost every other successful designer has found a style and stuck to it, Klein has built a billion-dollar business in his own evolving image. When he started his label, in the anti-fashion sixties, he wore long hair and publicly disdained his craft. “What can be great about designing fashion?” he asked in 1969. “Being a doctor, now, that’s great.” He lived in a rent-controlled Forest Hills apartment with the teenage sweetheart he’d married and their baby daughter. And he designed clothes-Trevira blouses, polyester print dresses-for people who shared his unsophisticated taste.

But within a few years, he had pronounced polyester “slimy,” moved to the Upper East Side, and started wearing Yves Saint Laurent suits.. He still designed simple careerwear but now with better fabrics.

Then, in the late seventies, Klein emerged from the cocoon of middle-class propriety and began testing his wings. He shed his wife and changed the package that his most important product-Calvin Klein-came in. Gone were his wide ties and flared pants, traded in for Levis, T-shirts, and exercisewear. He still worked long days, but now he danced his nights away in drug-soaked discos with a new pack of fast-lane celebrity friends. He threw parties in his sleek, new bachelor apartment with its black-leather-covered bed; made the scene with models, both male and female; and vacationed in Key West and Fire Island Pines. The clothes he designed reflected the times: He set styles for gay men, his women’s clothes grew still more expensive and elegant, and his status jeans served a growing fashion fascination among the masses.

In the eighties, with Reagan occupying the White House, a new Gilded Age descending on the country, and AIDS ravaging the gay community, Klein could be found dressed in charcoal suits and white shirts, hanging out either with a new, preppy girlfriend, his design assistant Kelly Rector, or with the decade’s new heroes, freshly minted corporate raiders and highyield-junk-bond traders. He was still selling himself-appearing in his own ads-and still trading in sex in promotions for a perfume and androgynous underwear. But his sex-in-advertising had become newly ambivalent.

As the decade progressed, Klein reinvented himself yet again. He married Rector, now 31, and-inspired by a word written inside a ring he’d bought her from the duchess of Windsor’s collection-conceived his new scent, Eternity. At his shows, old friends like Bianca Jagger and Steve Rubell now rubbed shoulders with new ones like Gayfryd Steinberg and Jerry Zipkin, as models paraded past in extravagant evening clothes that were a far cry from his signature sportswear.

Now comes the Eternity promotion campaign. In September, when the fragrance is nationally released, Klein will saturate the airwaves and periodicals with a reported $5.3 million worth of ads-ten-page photographic portfolios and ten 30second TV spots-selling, Klein told Women’s Wear Daily last month, “spirituality … love … marriage … commitment. I think that is a feeling that is happening all across the country.”

* * *

THOUGH PEOPLE WHO KNOW HIM ARE SYMPATHETIC about his problems with drugs and alcohol, some of them are cynical about this latest turn in the Calvin Klein journey. They claim Klein and Schwartz are positioning their company to sell it or expand it with other people’s money. In either case, they argue, Klein still has to establish that he’s in good health and condition to lead the company into the future. “It’s all about publicity,” says a fellow designer. Even Robin Burns, the president of Calvin Klein Cosmetics, acknowledges that Klein’s admission of his drug problems might help sales. “Calvin once told me there’s no such thing as bad publicity.”

“He’s the consummate P.R. guy,” says Stanley Kohlenberg, who was the first president of Calvin Klein Cosmetics and now runs Sanofi Beauty Products. “It’s harder to create an image than a fall look. He created an image. He was everyone’s fantasy of style, sophistication, and creativity. It was the life-style of the times. You could be any sex you wanted. The more outrageous you were, the better. He pushed the edge of the envelope. He had the drive, intelligence, and creativity to make a dreamworld come true.”

Though Klein continues to use himself and his realized “dreamworld” to sell his products, he refused to be interviewed for this article. ” `My Story,’ by Calvin Klein-that’s the only thing to be done,” said Wilmot, the P.R. man. But neither the designer’s official story nor the rumors that endure in the absence of a fleshed-out portrait do justice to the tale of his rise, fall, and recent revival. Interviews with more than 50 people, including current and former employees, close friends of Klein and his two wives, and retailers and financiers involved in his ventures, consistently paint a portrait of a contradictory man whose outsize life has caused him personal and professional problems.

“He used to be a sweetheart,” says an ex-employee who worked close to Klein for years. “He used to be able to separate his private life from his business life.” But then? “There were so many changes.”

“He knew he had to pay the piper for his celebrity,” another friend says sadly. “But he’s been paying all along.”

* * *

THE FIRST MAJOR ARTICLE TO FEATURE CALVIN Klein appeared in the New York Times in 1969 under the headline-ironic in retrospect — FASHION DESIGNERS WHO SHUN THE FASHION SCENE. The outlines of his story, first told in that piece, are now well known. He was raised in the Bronx, the son of a Harlem grocer and a mother who liked nice clothes. Klein would join her on forays to Loehmann’s, where he’d study marked-down Norman Norell designs. He attended the High School of Industrial Art and the Fashion Institute of Technology, graduating at twenty in 1962 and going to work as a $75-a-week sketch artist for the late Dan Millstein, an oldline cloak-and-suit manufacturer. Klein worked there two years, leaving when Millstein refused him a $25-a-week raise. “Biggest mistake Dan made in his life,” says Edward Millstein, his brother and co-owner of the firm. “We wanted to keep him but he was very ambitious.”

Today, Alan G. Millstein, Dan Millstein’s nephew and publisher of the Fashion Network Report, recalls that in 1964, his uncle lent Klein $400 so he could honeymoon in the Catskills with his bride, Jayne Centre, a textile designer who’d also been raised in the Bronx and attended P.S. 80 and F.I.T. “Jayne’s father was very concerned” about Klein’s income, recalls Jeffrey Banks, an ex-assistant.

Over the next few years, Klein had several jobs, including a stint as a copyboy at Women’s Wear Daily. In 1968, he borrowed $10,000 from his boyhood pal Barry K. Schwartz (who had inherited a Harlem grocery from his father) and set up Calvin Klein, Ltd., a cloak-and-suit firm. Soon after, during the riots following Martin Luther King Jr.’s death, Schwartz’s store was looted, and he joined Klein as an equal partner.

They had some quick successes: The story of Klein’s rolling a cart of coats uptown to win his first $50,000 order from Mildred Custin, president of Bonwit Teller, is a garment-center legend. Meanwhile, he, Jayne, and their daughter, Marci, who had been born in 1966, lived in Queens in three and a half rooms decorated with pink silk chairs, a green couch, a handme-down chest, and some Picasso lithographs. Klein drove a Plymouth to work at his tiny office in a suite in the York Hotel. He and Schwartz “worked like slaves,” says an early employee. The effort paid off in 1973, when Klein won the first of his three Coty awards. By then he had expanded his line from coats to a 74-piece collection of clothes for women, and the award cited his “nonconformist” but “classic” styles.

The marriage, however, was troubled. “They were so young,” says Gina Epworth, his first P.R. woman. “Calvin grew up so fast. They grew at different paces. She pushed him hard. If he got to the office at 8:20, she called at 8:22. The marriage started going bad because she couldn’t bear to not always know where he was. The first time he went to Europe, she called half a million times. He used to say nobody should be married. She was very unhappy. I don’t think he blamed her. I think he realized something was wrong with him.” Klein himself hinted at what had happened in a 1984 Playboy interview: “If you have to go somewhere else for sex, then why be married?”

Epworth’s husband, a lawyer, represented Klein in the divorce, which took effect in 1974. “It was the best divorce in history,” says someone who knows both parties. “He was incredibly generous with her. He bought her an apartment and several cars. It was all to do with his daughter.” (Klein is said to be devoted to Marci, who graduated in May from Brown. When she was kidnapped, in 1978, he paid $100,000 ransom and personally rescued her. Three kidnappers, including a former Klein baby-sitter, were later captured and convicted.)

After the first Coty, Klein cut back from more than 1,000 outlets to 250, at the same time upgrading his fabrics and his image. “I remember him understanding that something was marketable besides the clothing,” says an early Klein assistant. “There was something going on besides design and shipping.”

As the seventies progressed, Klein spread his wings. Before their divorce, the Kleins had moved to the East Side, and there Klein met a boyhood hero, designer Chester Weinberg. After his divorce, Klein dated several women, but he also often went dancing in gay discos like Le Jardin, 12 West, and Flamingo and shared a house with another designer, Giorgio di Sant’Angelo, in the predominantly gay community Fire Island Pines. Weinberg and di Sant’Angelo introduced him to the sophisticated, anything-goes fashion world, teaching him “about society, about travel, about the world,” a friend says. “Calvin was growing and learning, freeing himself finally.”

Klein also changed his looks-so dramatically that many people wondered whether he had had plastic surgery. He has denied this, and some acquaintances say he simply started working out and treating acne scars with silicone injections. Fashion photographer Richie Williamson recalls meeting Klein in Fire Island Pines in the old days. “I’ve never seen such a transformation in my life,” he says. “One year he was bland Calvin. The next year, he looked incredible.”

Still, Klein was overshadowed-both by day, in the fashion world, and at night, in clubs like Hurrah and Studio 54-by Halston, a designer who was about ten years older. “Calvin was jealous of Halston,” says an acquaintance. “Halston created an aura, a mystique. What Halston had, Calvin wanted.”

The mystique that Klein then created for himself was in large part sexual. Speculation about his preferences started in those days-and Klein didn’t discourage it with his behavior. Over the years, he was often seen in gay hangouts like Rounds and Private Eyes. But he was just as often seen with beautiful women as with men.

One artist who spent many hours in Studio 54 in the late seventies, before owners Steve Rubell and Ian Schrager were arrested for skimming proceeds, says he came to know Klein well. The artist says that Klein, along with Halston and a fast-track pack of bi-coastal fashion- and entertainment-world bachelors, would stand near the club’s bar dispensing free drinks. “They referred to themselves as the inner circle,” the artist says.

Klein has never commented publicly on his sexual preference. But in Playboy, when talking about “a very wild period” he went through, he said, “I’ve fooled around a lot. I stopped at nothing. I would do anything” (his emphasis).

He has also denied that he was heavily involved with drugs in the seventies. But acquaintances say he ran with a crowd that took Quaaludes and snorted cocaine to stay up.

* * *

KLEIN’S EMPIRE, MEANWHILE, WAS EXPANDING with his fame. Beginning in the late seventies, he and Ralph Lauren, another Bronx-born designer, took Halston’s celebrity-designer stance and raised it to an art form. Their careers ran parallel (though family man Lauren was and is more private) and their rivalry has always been intense. They used similar advertising shots by photographer Bruce Weber. Klein hired his first contract model, Jose Borain, away from Lauren. Kelly Rector, too, came to Klein’s employ from Lauren’s studio.

Stanley Kohlenberg was at the center of an early struggle between the two fashion titans. He met Klein through his wife, who was a nurse for a doctor who treated the designer. Klein had decided he wanted to compete in the cosmetics-and-fragrance arena, and Kohlenberg-then an executive vicepresident of Revlon-went to work for him early in 1977.

Lauren had signed a fragrance license about six months before, and Klein and Schwartz wanted their products out no later than his. To find out what perfumes Klein liked, Kohlenberg says, “I bought every fragrance in the United States, masked them, and sprayed him with three a day. He hated everything except musk.” So Kohlenberg asked a fragrance house, International Flavors and Fragrances OFF), to develop a scent. Klein’s advisers rejected it, though, and IFF got Kohlenberg’s okay to offer the reject to Lauren. (A spokesman for IFF wouldn’t comment.)

A Klein aide finally found a fragrance in Paris that the designer liked. Meanwhile, both Klein and Lauren were negotiating with department stores that wanted to introduce their lines. Bloomingdale’s had set a date in early 1978 for Lauren and offered Klein a launch a week later. “Calvin couldn’t break after Ralph,” Kohlenberg says, “so we went to Saks.” But the fragrance Klein had chosen didn’t sell well, Kohlenberg says. “A week later, Barry called me screaming-his usual tone of voice.” Lauren’s fragrance was outselling Klein’s.

“Have you smelled it?” Kohlenberg asked Schwartz.

Five minutes later, Schwartz called back, screaming, “This is our fragrance!”

“We turned it down,” Kohlenberg reminded him. Looking back now, he laughs. “It was downnill from there.”

“Schwartz, with his Midas touch, was used to seeing money being made,” says another ex-employee. “I think he got impatient. He didn’t want to be bothered.” In November 1979, he ordered Kohlenberg to close the cosmetics company, fire his staff, and even cancel the airplane tickets of salesmen who were on the road. Frank A. Shields, the head of sales, had a contract, but when he took a few days off at Christmas, Schwartz fired him too. (He later sued and collected on his contract.) In an interview with Fortune, Shields recalled having lunch with his fifteen-year-old daughter, Brooke, and telling her that he was suing the Klein company. Later during the meal, he asked her what she was doing the next day. “I wish you hadn’t asked that, Daddy,” Brooke Shields replied. “I’m shooting six 30-second TV shots for Calvin Klein. He makes the only designer jeans I like.”

* * *

THE CLOSING OF THE COSMETICS COMPANY WAS SERIOUS, but the growth of Klein’s business had been impressive nonetheless. By 1978, Klein was offering hundreds of designs each season. Though not known for innovation, he helped define what came to be known as “the American look.” Typically, that meant understatement and a complete absence of gimmickry. He has used luxurious fabrics-cashmere, suede. fine wool, tissue-thin linen, and crepe de Chine in subtle colors, for example-but always in an easy, sexy, elegant, and modern manner. Though best known for daytime clothes, he is a master of the little black cocktail dress. And at the other end of the fashion spectrum, his jeans and associated low-priced styles have consistently struck chords with the buying public.

Much of the responsibility for Klein’s recent appeal rests with Bruce Weber, who, with his revolving team of hairdressers and stylists, creates Klein’s print advertising. The ads set a mood that frames Klein’s styles. Sometimes the mood has been even more important than the clothes. In one 1984 ad campaign, for example, the clothes virtually disappeared, replaced by ladders, bleached longhorn skulls, and Klein himself, stretched out languorously on a bed or leaning against a fireplace in Georgia O’Keeffe’s Ghost Ranch in New Mexico.

Over the years, the company’s volume rose regularly. In its first year, wholesale revenues were $500,000. Klein claimed that his wholesale volume rose $1 million a year through the early seventies. By 1977, those annual revenues had leaped to $30 million, and he had licenses for scarves, shoes, belts, furs, sunglasses, and sheets; Klein and Schwartz were making $4million each. After the company signed licenses for cosmetics, jeans, and men’s wear, a 1978 Newsweek cover story put Klein’s annual retail volume at $100 million. The jeans alone were a gold mine. Klein claimed sales of 200,000 pairs the first week they were on the market, in 1978. By 1981, Fortune magazine figured Klein’s annual income at $8.5 million a year.

The stunning growth continued through the early eighties. The licensing program, which brought in $24,000 when it was initiated in 1974, had royalty income of $7.3 million ten years later. That year, worldwide retail sales were estimated at more than $600 million. Klein’s clothes were sold through 12,000 stores in the United States and were available in six other countries. His annual income passed $12,000,000.

His studio kept pumping out successful new products. In 1983, WWD declared his men’s-style underwear for women the hottest look since the bikini brief. A year later, he sold the division that made them to Kayser-Roth Corporation for $8.3million in cash and future payments valued at $2.9 million in 1984 dollars. In 1985, Calvin Klein Cosmetics, which had been sold to Minnetonka Industries, a personal-products company, the year after Schwartz closed it, catapulted his name to the top of the fragrance market-and filled his pockets with more royalty income-with a stunning success, Obsession.

* * *

BUT AS KLEIN’S RETAIL VOLUME CLIMBED, SO DID THE volume of ugly rumors about him, despite his nickname, Calvin Clean. “People in stores would ask me all the time if he was dying of AIDS,” recalls a former salesman for Klein’s jeans company. Klein has repeatedly denied the AIDS rumor. The source of it isn’t clear. Klein has said he thinks it began in 1982, when he entered Lenox Hill Hospital with viral meningitis. He’s also suggested that he was confused with Carl Rosen, the owner of Puritan Fashions, Klein’s jeans licensee, who died of cancer in August 1983. In any case, Klein was troubled by the talk.

In November 1983, armed with $75 million in loans from Manufacturers Hanover and Chemical banks, Klein and Schwartz threatened a hostile bid for Puritan. After the death of Carl Rosen, his 27-year-old son, Andrew, had been appointed the company’s president. As jeans sales declined generally, Puritan’s profits started to slide and the company began discounting Klein’s jeans. “You can’t sell $140 perfume and have your jeans at K mart,” explains Joel “Corky” Newman, who later became president of Calvin Klein Industries. By the beginning of 1984, Klein and Schwartz had completed a $105million leveraged buy-out of Puritan. (They then renamed the consolidated companies Calvin Klein Industries.)

At about the same time, Kelly Rector’s name began to be linked romantically with Klein’s. Klein had never encouraged anyone to take previous “dates” like Brooke Shields and Lisa Taylor seriously, but Rector was different. Klein told Playboy he adored her. “It’s nice to combine sex with love,” he said.

* * *

BORN IN DETROIT IN 1957, SHE GREW UP IN Westport, Connecticut, the child of a broken home. Kelly’s mother, Gloria List, who owns a folk- and Indian-art gallery in California, and her father, Tully Rector, a onetime TV-commercial director and horseman, have both been married and divorced more than once, according to a friend of the family. Rector’s parents both declined to comment.

Her first serious romance was with Sam Edelman, who made Ralph Lauren shoes under a license and whose family once owned Fleming Joffe, the alligator-, crocodile-, and lizard-skin company. “I remember the night Ralph offered her a job,” he says. “It was at the opening of a Saks boutique. She’d just graduated from F.LT.” She went to work in Lauren’s design studio in 1979. “Kelly had very Ralph Lauren style,” a Lauren employee says. “Clean, fresh, kind of preppy. In this business, when you see someone with style, you say, `Gee, work for me.’ ” At the studio, though, the co-worker says, Rector didn’t make major contributions: “She was looking for a life, someone to take care of her. She didn’t seem to be a career girl.”

Rector’s next boyfriend, Christopher Maytag, great-grandson of the founder of the home-appliance company, died in March 1987 of chronic intravenous-narcotics use (he had been found semi-conscious in a Lower East Side hallway). Rector also dated Cary Leeds, a Yale student and professional tennis player who is the son of Laurence Leeds, until recently the chief of Manhattan Industries, the company that makes Perry Ellis fashions. After Leeds, she went out with John Leffler, a successful musician who works in advertising. While they were dating, Rector got a new job assisting Calvin Klein.

“She was unhappy at Ralph and wanted to change jobs,” says a key employee of Klein’s at the time. Klein’s first impression wasn’t overwhelming. “The last thing I need is another pretty face with an opinion,” he told the employee after meeting Rector. But a studio slot stayed open, and early in 1981, she was chosen to fill it.

* * *

AT FIRST, RECTOR WAS KNOWN AS “THE SKIN GIRL.” Klein would hold fabric against her wrist to test color. “Then, all of a sudden, she had influence,” says a colleague. Studio gossip had it that Warren Beatty was indirectly responsible for her ascension. “They met at a party,” a friend of Kelly’s says. “Beatty invited her to L.A. She flew out for the weekend. I don’t think sparks flew.” They did, though, when Klein learned where Rector had been. “He was jealous,” recalls a former assistant. “In the end, he wanted her for himself.”

Eventually, Rector was given the title of design director. “I saw her as a cross between morale-booster and buffer,” says a designer who reported to her then. “She was the regent. She’d make jokes. She’d get information.”

She and Klein appeared to be lovers. “When she spent the night, we knew,” says the designer. “She’d come in in the same clothes. It was like a press release, in a funny way.”

The relationship was much discussed in the studio. “A day at Calvin Klein without rumors was like a day, without sunshine,” laughs one ex-employee. And Rector’s promotion caused jealousy. “We all had a crush on Calvin,” another ex-employee says.

“No human being ever treated me like Calvin did,” says one woman. “He believed in me. He stimulated me. He taught me. He still has me. Even today, when I hang up from talking to him, I’m high. He could call me in the middle of the night and say `I need you’ and I’d drop everything. It frightens me. I’d do anything for him.”

One male former assistant describes “a feeling of supernatural power” emanating from Klein. “He’s extremely seductive and sexy, and he knows it and he uses it. You feel like a little lamb in his lair.”

Klein has a record of generosity toward favored friends and employees. He paid rent and, later, funeral expenses for one of his early mentors, Baron Nicolas de Gunzburg, an aristocratic former Vogue editor, one early employee says. After Weinberg’s fashion house failed, Klein hired him in 1978 as a consultant and later as design director for Calvin Klein jeans. Then, when Weinberg grew too ill with AIDS to work, Klein kept him on half-salary. Klein’s unpublicized largess was also extended to Giorgio di Sant’Angelo, who recuperated from surgery last year in a house Klein had rented in Palm Beach.

On the other hand, some Klein employees left abruptlyand not always happily. Frances Stein, for example, who’d become a top aide in 1976, left suddenly a few years later. In 1985, Klein’s longtime personal assistant-known among the staff as the English nanny-“was thrown away like a used Kleenex” after taking a leave of absence to attend to personal problems, says one of her friends.

Through Stein’s era and after, primary design responsibility was in the hands of Zack Carr, who’d arrived in 1975. Carr “was Calvin Klein,” an ex-employee says. But Carr left in 1984, at about the time that Rector was promoted to design director.

In the mid-eighties, Klein had two sensational sex-and-advertising-driven successes-underwear, which grossed $70million in 1984, the year after it was introduced, and Obsession, which was released in March 1985. Still, there were ample reasons for Klein to be concerned about his image. For one thing, the health rumors persisted, despite the affair with Rector.

What’s more, because of the Puritan purchase, Klein and Schwartz “were personally on the hook to Manufacturers Hanover,” says Corky Newman. “The worst of the jeans crash occurred after the acquisition,” adds Fred McCarthy, an executive of Drexel Burnham Lambert, the investment house. “It went from jeans everywhere to jeans nowhere. The banks were somewhat nervous.” Klein and Schwartz needed long-term financing to retire the onerous short-term bank debt.

A former Klein employee says that at dinner one night, Klein told his friend Barry Diller about the loans. Then the chairman of Paramount Pictures (a subsidiary of Gulf & Western Industries, which, through its Kayser-Roth division, had bought Klein’s women’s-underwear business), Diller was alsoaffiliated with companies that bought issues from Drexel, the pioneer of the high-yield-junk-bond business. In response to Klein’s plea, “Diller made a call,” the employee continues. “Within days, Calvin was meeting Drexel.”

In 1985, Klein and Schwartz attended Drexel’s so-called Predators’ Ball, where companies seeking financing made presentations to investors like Guy Dove III, a former Drexel employee; Dort Cameron, who works for the Bass family of Texas; and industrialist Carl Lindner. That year, Drexel placed $70 million in high-interest, high-risk notes for Calvin Klein Industries. There were two types of notes sold: senior notes paying 137/a percent interest, which come due in 1993, and subordinated notes paying 145/s percent, which are due in 1995. Dove’s Atlantic Capital Corporation bought $4 million of Klein’s notes, the Bass Investment Limited Partnership anted up $15 million, and Lindner’s Great American Insurance Company chipped in $5 million. David Paul, chairman of Florida’s CenTrust Savings Bank, kicked in $20 million and became a director of Calvin Klein. McCarthy says there has been limited movement in the notes since their original issuance. Schwartz has attended several more Predators’ Balls, McCarthy says.

Drexel was a shareholder in some of the investing companies and, in addition to its $3.3-million fee, came away from the deal with an option to buy an equity stake-1 1/a percentin Calvin Klein Industries should the company go public. That was its plan, Newman says. But in 1985, a stock offering was abandoned when “Drexel gave them the real price” Klein and Schwartz could realize for the company, another former Klein executive says. “Calvin recoiled. It was less than he expected.” Newman confirms that the plan was shelved.

* * *

ANOTHER PROBLEM CONCERNED KLEIN’s ONCE-successful men’s-wear licensee, Bidermann Industries. Key employees were leaving. The line wasn’t doing well. One former design-staff member believes Rector’s preppy influence on Klein’s personal style hurt the collection: “All of a sudden it was rep ties and plaid suits. He’d loved being boyish. Then he became this proper gentleman. It was as though he was denying everything that had gone before.”

Festering disputes arose between Klein and the manufacturer. Bidermann’s 1977 license with Klein had been for all his men’s clothes. But when Puritan won the jeans license in 1978, it received a sublicense to make a few specific items for men: jeans and Western shirts,for example. “There were immediate disagreements,” says a former Klein executive. “Calvin’s weight came down on Puritan’s side.” Displeased with the quality of Bidermann’s manufacturing, he began withholding necessary approvals for its designs and finally “refused to work,” a former Bidermann executive charges. In 1986, lawyers for Bidermann began “investigating Calvin’s lack of attention, attendance, and cooperation,” says a Bidermann designer.

In the fall of 1986, it became obvious that Klein was under great stress. In September, Bergdorf Goodman introduced his exclusive couture collection at a benefit dinner full of society people. Steve Rubell had helped organize the event to restore the Pulitzer Fountain. “I’d never seen a man so nervous,” a staffer says of Klein. “He’d had a lot of different substances to calm down.” During the dinner that followed the show, Klein shared a table with Rector; the evening’s chairman, Nancy Kissinger; two Pulitzers; Vogue’s editor, Grace Mirabella; and Bernadine Morris of the Times, among others. In a scene that was becoming common, Klein drank most of a bottle of vodka that had been placed before him.

Nine days later, Klein married Rector in the office of the mayor of Rome. They shared their honeymoon in Italy with design assistants who’d accompanied them on what was officially a fabric-buying trip. Staffers even joined the newlyweds when they went out at night.

* * *

BACK IN NEW YORK, THE NEW MRS. KLEIN “DISAPPEARED” from the studio, says a former assistant. “She started going to the Hamptons.” The mood in the studio was “completely different. Much nicer.” For the line, the assistant says, “it was like a rebirth” because the attitude was no longer ” `Let’s design Kelly’s personal wardrobe.’ ” At the end of the year, Grace Coddington, a British Vogue editor, replaced Kelly, at a reported six-figure salary. Klein, who over the years had become more an executive editor than a day-to-day designer, further removed himself from the design process.

Kelly Klein, however, still had a role to play besides riding her beloved horses. Her husband told an executive of a New York specialty store that his marriage had opened up new “publicity opportunities” for his company. He proved his point soon after when he bought Kelly a pearl necklace and ring from the duchess of Windsor’s collection. In January 1987, the Kleins made their first social splash as a married couple at the Council of Fashion Designers of America’s awards dinner. In February, Klein bought property worth almost $6 million in East Hampton. (He’d sold his Fire Island and Key West houses the year before.) He even told reporters that he’d stopped drinking and smoking for his new wife.

Klein apparently fell off the wagon coincidentally with another round of business reversals. Staff changes continued unabated. “The turnover is quite remarkable,” says an outside contractor who has worked on Klein’s fashion shows for several years. “Every season there’d be different people there.” Says another former designer, “I wondered how I survived.”

In April, Klein’s dispute with Bidermann was settled when he bought back his license for a reported $13 million. Then, on the first Monday in June, Calvin Klein Industries president Corky Newman resigned. The same day, the eve of a fabricbuying trip to Europe, several designers and assistants who’d been hired to create an in-house men’s line were fired. The next day, Edward M. Jones III, a former executive of the Klein division at Bidermann, resigned a new job as president and international-licensing director of Klein’s moderately priced Classics division. It was a lousy week, but things got worse.

* * *

LAST OCTOBER, THE SALE OF CALVIN KLEIN Industries to another Drexel-financed company, Triangle Industries, a container manufacturer, fell through on the day the stock market crashed. Klein grew “terribly depressed” and started “taking Valium all day long from nerves,” says a friend. In November, Klein’s women’s spring ready-to-wear collection was roundly panned-a shift of emphasis toward evening dresses from the simple daytime sportswear that had always been Klein’s forte “didn’t go down so well in Middle America,” according to the head of one prestigious big-store chain. Coddington’s key designer, Steven Slowik, was fired after that show. A week later, Classics, which was unprofitable, was abruptly shut down.

Once again, Klein rumors began ricocheting around New York. Some were about business. Schwartz has denied it, but a top money manager says the Klein company is still for sale, “if you want to buy it.” There was also talk that Klein and Schwartz were trying to buy Minnetonka Industries, their cash-rich fragrance-and-cosmetics licensee. By late last year, the two men had bought over 12 percent of the company’s stock and filed documents with the Securities and Exchange Commission stating that they might seek control of the highly profitable company. Subsequently, Minnetonka adopted measures to make a hostile takeover difficult but denied the actions were aimed against Klein and Schwartz, whose ventures generate most of Minnetonka’s revenues.

Mostly, though, the gossip was about the Kleins’ marriage. Friends of Kelly’s were concerned, particularly those who believed, as one puts it, that “there was business stuff behind it at first.” When she’d started dating Klein, this friend had asked about her life with him. She answered that things were fine. “His past didn’t bother her,” the friend says.

These days, another friend reports, Kelly will sometimes “shake her head and say, `It’s really hard.’ I don’t know how she’s coping. But she’s a big girl. She knew what she was getting into.”

At the heart of the rumors were the facts that Klein was frequently seen in hip nightspots with Rubell and his crowd and that the Kleins maintained separate apartments as they searched for a new home. Klein has a large, contemporary penthouse he bought from the composer Jerry Herman on Central Park West. Kelly was a few blocks away in an oldfashioned duplex she’d bought from the model Christie Brinkley. Their first attempt to get a place together failed in January 1987, when the nearby San Remo co-op board refused Klein’s bid to buy the producer Robert Stigwood’s penthouse.

Though Kelly put a good public face on it, calling the rumors “funny,” privately she was upset. “It’s mind-boggling,” Patricia Burnham, a Realtor friend of Kelly’s, says of the rumor-mongering. “It’s so unfair.” Last December, Burnham quietly found Klein a $6.95-million townhouse on East 76th Street. It belonged to an offshore corporation owned by a man involved in a divorce. “There were lots of liens and lawsuits on it,” Burnham says. But knowing how much Kelly liked it, Klein “hired a whole team of lawyers” and “cleared up the suits.”

“You’ve never met a husband more adoring than Calvin Klein,” Burnham concludes.

The feeling is apparently mutual. “Kelly is the best thing that ever happened to him,” a friend of Klein’s says. “Maybe she loves him for all the wrong reasons, but she loves him,” agrees a former co-worker.

Still, she couldn’t keep him from “bottoming out,” as one friend puts it.

Some of Klein’s acquaintances saw signs of trouble in his increasing concern with the worlds of money and society. “He got to the point where unless somebody was worth $100 million, they were nobody as far as he was concerned,” one former executive says.

“Now he wants to enter the world of society,” says another former employee. Before his last show, he was juggling the invitation list “to make room for socialites. It’s like he’s trying to prove something. Calvin no longer knows what he wants in his collection or his life.”

All the rumors and all the business problems added to the incalculable pressure of having to be judged time and again on collections that must be new, but not too new. And it’s easy to believe that Klein, having been through so many scenes, erected so many fagades, and lived with so many self-images, could have lost sight of the boy from the Bronx.

“It’s tough to face yourself at every level,” says designer Diane von Furstenberg, a friend. “At this point, he’s facing himself, I guess.”

In late April, Klein checked into Hazelden, a 288-acre, campuslike clinic for the chemically dependent in Center City, Minnesota, which has been treating cross-addiction since the fifties. Its celebrated patients have included Truman Capote, William Hurt, and Kitty Dukakis. Several New York gossip columnists got wind of the story and checked with Paul Wilmot, who insisted that Klein was vacationing in the Caribbean. Finally, on Monday, May 9, Wilmot’s office released a statement saying that Klein had been in Hazelden for almost two weeks.

“I have never felt better,” the designer was quoted as having said.

* * *

THE OUTLOOK IS POSITIVE for this latest Calvin Klein. Zack Carr returned to the studio in December 1987, and the fall collection, now in stores, was a critical success. Kelly Klein, too, has returned to her husband’s employ after a brief stint at HG magazine. As vice-president in charge of special projects, she has a mandate to help Klein in all areas of the business. And while Klein was in Hazelden, his first franchised retail store opened in Dallas.

Initial sales of Eternity indicate that Klein has another great success on his hands. Its name may symbolize Klein’s hope that his name will survive him, as the names of Dior and Chanel survived those designers, but for now, his presence is still required. As the Klein company’s 1985 Securities and Exchange Commission filing put it, “There can be no assurance that [Calvin Klein Industries’] present level of sales could be maintained if the personal design and supervisory services of Calvin Klein were no longer available to it.”

That’s why, a few weeks after leaving the clinic and ten days after his appearance at Saks, Klein flew down to Washington on his Gulfstream II jet for a black-tie fashion show benefiting the Duke Ellington School of the Arts. The day of the show, Klein toured the high school, signing autographs for its awed students.

“To the kids, what he’s done is real important,” said Peggy Cooper Cafritz, the benefit’s chairman. “To them, there’s a heroic dimension to his not letting himself be pulled all the way down.”

Has Klein at last become Calvin Clean? It’s a perfect image for the nineties. And it might even play for eternity.

©1988 Michael Gross