Calvin Klein on 'Kiddie Porn' Advertisements

In the Water Tower Place Mall in Chicago last week, Jennifer Marks and her mother. Clara, had a Calvin Klein problem. His ads were "absolutely" pornographic said Clara. 41. "They're exploiting children." It was the day after Klein had announced that he was pulling his controversial new ad campaign, and Jennifer and Clara were debating one of the posters. Against a backdrop of cheap paneling and purple pile carpet, the ad showed a very young-looking girl in a skimpy tank top, her jeans pushed below her bellybutton. "Where are the parents who are allowing their child to do this?" asked Clara. They had come to the mall together, Clara and Jennifer. And now here they were--in the juniors department of Marshall Field's--at opposite sides of a cultural divide. "I wouldn't allow my daughter to dress like that." said Clara. "And she knows it."

But to Jennifer, 15, the image had a different meaning. "I think she looks cute there," Jennifer said. "All my friends wear pants down past their underwear." In her school, she said. Calvin Klein was the most popular designer, though boys were always stealing her Victoria's Secret catalog. "I don't think they're exploiting her at all," Jennifer said of the gift in the ad. "She's got the body to wear it. Why not? I can't believe there's a controversy over this."

To veteran watchers of Calvin Klein, Inc., it had seemed like just another marketing splash. For the last 15 years, Klein has built a fashion empire largely by tapping both the charge and the cultural unease about youthful sexuality. In the early '80s, when feminists like Gloria Steinem protested his crotch shots of a 15-year-old Brooke Shields cooing that nothing came between her and her Calvins, and some TV stations refused to air the spots, Klein simply banked the controversy. "F--k off," he said to Steinem (through a later interview in Playboy); with Brooke's pouting, his jeans sales nearly doubled. Since then, as he erotiecized the nubile bodies of Marky Mark and Kate Moss, Klein refined the formula. When the current ads for CK Jeans rolled out in early August--discomfitingly intimate snapshots of very, young men and women in provocative states of undress--they carried the shock of the old. In a NEWSWEEK interview last month, Klein likened the ads to Warhol. Shot by top fashion photographer Steven Meisel, the campaign was nearly identical to a pictorial by Meisel in the Italian magazine L'Uomo Vogue--right down to the paneling and carpet. Klein said matter-of-factly: "I'm sure they're going to be controversial." It was vintage Calvin. Says Bob Garfield, ad critic for Advertising Age, "He discovered long ago what Benetton and Al Sharpton discovered. If you make a small amount of the right kind of noise, the media will deliver you tens or hundreds of millions of dollars' worth of free publicity."

But as the free publicity mounted--the front page of New York's Daily News howled THIS ADS UP TO PORN as it dutifully showed off one of the offending ads--the circus took a different turn. Even for people who shrug off Madonna videos and the Fox TV network, these ads were creepy. The kids looked too young, the situations too intrusive. In the TV spots, the largely nonprofessional models squirmed as an off-camera older man asked leering questions or gave directions: "Take your jacket off. Let's check out the results." The ads drew comparisons to child pornography. The company says that most of the models "are adults, as old as 29."

Some retailers rebelled. Dayton Hudson. the giant Midwestern retail conglomerate, urged Klein to pull the ad campaign. "Our company's point of view is that the ads were offensive," said Dayton Hudson vice president Mary Hughes. "This is the '90s. We just culturally don't deal with children." Protesters threatened to picket department stores like Macy's and Wal-Mart. One New York City councilman even called for a boycott of the designer's products.

The scandal also threatened to cast a shadow over Klein's three imminent corporate megamoves. After a decade of paying down debt. Klein is on the verge of a major expansion that he hopes will raise his international stature to the level of Ralph Lauren. Yves Saint Laurent and Giorgio Armani (Chart, page 66). On Thursday, the company will open a 20,000-square-foot flagship store on New York's Madison Avenue. The same week. he unwraps Calvin Klein Home. a $10-to-$1,575 line of sheets, towels and tablewear likely to provoke the question: how much is too much for a no-frills beige bedsheet? (One answer: $80.) After that, he'll launch cK one perfume worldwide, trying to duplicate the spectacular success of last year's U.S. introduction. The fragrance grossed $60 million in its first three months, by many accounts the richest debut in perfume history. But his real goal is to push his menswear, womenswear, jeans and underwear to Europe and Asia.

For Calvin Klein, Inc., the moment is ripe: his competitors, including Lauren, Donna Karan and the Gap, have already made some headway overseas, meeting a ravenous new demand for casual sportswear, especially with an American flavor. And the home-furnishing trade, driven by baby-boomer cocooning, is burgeoning. On Aug. 28, in a full-page ad in The New York Times, Calvin Klein, Inc., issued a statement that it was "taken aback" that its campaign had been "misunderstood," and it was pulling the ads. The company insisted that "The message of the . . . campaign is that young people today . . . have a real strength of character and independence." Last Wednesday, Klein told NEWSWEEK he was "shocked" that other people didn't get it. "My intention was not to create a controversy, in spite of what some people think" (page 64).

From the living room of Klein's $6 million summer estate in East Hampton on New York's Long Island, you can take in drop-dead views of the Atlantic Ocean and Georgica Pond. Steven Spielberg and billionaire financier Ronald Perelman have houses nearby. An oasis of vanilla--white, overstuffed sofas, sheer curtains framing double-height doors--Klein's home is a monument to his softly muted sensibility. It is also a measure of his notorious perfectionism: not satisfied with what nature provided, Klein has reportedly trucked in his own pine trees and dune grasses.

On a Friday afternoon in early August, Klein sat on a sofa, comfortably rumpled in black CK jeans and sockless CK oxfords. "I'm a typical American," he said. At 52, the man routinely described as "boyishly handsome" is no longer boyish. His brown hair is thinning, spiked with strands of silver that match his Calvin Klein glasses. "Years ago, I only thought about the United States," he continued. "I don't speak any foreign language. I tend to travel as little as I can. And I didn't realize, you know, what a marketplace there is for us out there."

There is a story that Kal Ruttenstein, Bloomingdale's senior vice president of fashion, likes to tell about Klein. The two men and Klein's wife, Kelly, were dining at a New York Chinese restaurant a couple of years ago, and the designer deemed the wonton soup too salty. No one else had complained, the waiter insisted, but Klein sent the soup back anyway. Says Ruttenstein: "He explained that he was Calvin Klein and if he says the soup is too salty, then it's too salty because he understands what America wants."

His widely publicized years of omnivorous play during the '70s heyday of Studio 54 seem to be well behind him. So do the personal pressures that landed him in the Hazelden clinic in 1988 for addictions to vodka and Valium. He won't answer questions about his personal life, or about last year's unauthorized biography, "Obsession," which chronicled Klein's alleged homosexual liaisons and fast living. "I don't think anyone who's been writing about me really knows about my personal life," Klein says. Friends describe him as mellowed. Studio 54 cofounder Ian Schrager recounts a small gathering at the Kleins' East Hampton house a few Saturdays ago. When Schrager and his wife left shortly before 11 p.m., the party was winding down. "You know," Schrager says with a laugh, "there was a time when we used to get up at 11 to go out."

But Klein has not lost his competitiveness. Over the last year, he's stolen his new corporate president from Giorgio Armani, his European director from Ralph Lauren and the head of his mid-priced CK division from Donna Karan, stoking rivalries that are already of operatic proportions. "It doesn't come from my mother or my friends or what other people think about what I'm doing," he said, explaining his drive. "It's about me. I certainly want people to buy us, because we're in business and we need to pay the rent. But it's the journey of expanding around the world that challenges me."

In the world of fashion, where the guy who hangs the lights is a "genius," Calvin Klein is regarded less for his clothes than for his marketing savvy. Klein's collections--elegantly draped, understated lines that have earned him the nickname "Calvin Clean"--have won a number of fashion-industry awards, but in Europe they have never earned the distinction of Armani or the top Parisian couturiers. And the collections remain a very small part of his trade. The real money, and Klein's celebrity, come from fragrances, underwear and status-priced jeans, all manufactured by licensees and driven by Klein's titillating advertising. As his daughter, Marci, 28, said last year, "My only complaint about having a father in fashion is that every time I'm about to go to bed with a guy I have to look at my dad's name all over his underwear."

At Calvin Klein, Inc., Calvin himself is known more as an editor rather than as a generator of ideas. "Our job is to bring him ideas and thoughts," says Neil Kraft, formerly chief of Klein's $50 million in-house ad agency. "His job is to choose the ones that mean the most to him." And for nearly two decades, his sense of the Zeitgeist has been uncanny. "In his advertising, in what he does, he is the best," says French designer Karl Lagerfeld, who brought Chanel from near death to one of the hottest labels in the world. "It may not be what my colleagues want to hear, but I'm a worldwide name, too, and I don't give a damn, my dear."

In the late '60s and early '70s, as American women flooded the workplace, Klein made his name by introducing decidedly non-European women's clothing that was simple and functional. With the sexual revolution, he snagged men and women with body-fitting designer jeans and the racy tag line "What comes between me and my Calvins? Nothing." In the mid-'80s, he tapped sexual decadence with a perfume called Obsession. Borrowing trend-watcher Faith Popcorn's late-'80s buzzword, "cocooning," he evoked monogamy with Eternity: ads showed a family walking on a beach. And in the high-stress early '90s, he launched Escape.

But Klein has not always made the right moves. Three years ago he was near financial ruin. The problems began in 1983, when Klein and his childhood friend and business partner, Barry Schwartz, bought their jeans manufacturer and licensee, Puritan Fashions. During the peak of the designer-jeans craze in the late '70s and early '80s. Klein was shipping 500,000 pairs a week, and netting $1 a pair in royalties, with little cash outlay. But by the time they purchased Puritan for $65.8 million. America was designer-leaned out. And when Klein's creditors got nervous two years later, Michael Milken refinanced the debt with $80 million in junk bonds. "Every color choice became life or death," says Klein, "because doing everything as well as possible meant survival."

They survived thanks to Klein's old friend David Geffen, who, in 1990, sold Geffen Records for $700 million. In 1992 he bought $62 million of the company's debt bonds and held on to them until Klein could afford to buy them back. (He did, the next year, with a Citibank loan.) More critically. Geffen forced his friends, for the first time, to do some long-term planning. "What Calvin is a genius at is design and marketing," Geffen says. "What Calvin and Barry are not good at is manufacturing." They listened. Last year they sold the underwear business to Warnaco for $64 million and the jeans business to a partnership of Rio Sportswear and Charterhouse for $50 million.

Effectively, they turned Calvin Klein, Inc., into a money machine. Except for the signature women's collection and CK men's and women's wear, everything that bears Klein's name is made by licensees. Klein nets 5 to 10 percent of wholesale revenues in royalty fees. Last year the wholesale fragrance business alone topped $400 million. "Where Calvin made all the wrong moves in the '70s and '80s, he's made all the right moves in the '90s," says Alan Millstein, editor of the Fashion Network Report. Klein's operating income has soared from $15 million in 1992 to $31 million last year. Working capital has risen to $85 million, more than enough a to finance a global push.

Gabriella Forte, his fiery new president, is eager to chart the way. Forte, 46, spearheaded Armani's worldwide march, and her stealth hiring 16 months ago--at an annual salary observers estimate at $1 million--stunned fashionites on two continents. "Gabriella was Armani," one said at the time. Armani's unusual public display of fury was the clearest measure of her worth. "He recruits my people, my collections," he snapped at Klein. "Next he will be calling me up to head his design studio." Those who know Forte say she's even more tough-minded than her bosses. "She's the Jeffrey Katzenberg of fashion," says Geffen.

Though klein started out late, his timing may be opportune. "Perfectly dressed Europe is gone," says Richard Martin, curator of the Costume Institute at New York's Metropolitan Museum of Art. Though Klein's collection lacks European prestige, he can invade an already Levied and Gapified continent with his T shirts and jeans. At the same time, in Asia, where Western labels, from Chanel to Gucci, confer rank, Klein can trade on his American signature. "If I were Calvin Klein, I would certainly want to overstate my Americanness," says management professor Allen Morrison. He even suggests that Klein add Old Glory to his label. (Well, maybe not: Ralph Lauren already has the flag market cornered.)

And what about his ads? Well, what about them? Europeans were airing racy condom ads on TV while Americans were still shy about using the word in polite company. As for the Far East, "most Asians would look at Calvin Klein's ads as a piece of art, a mood," says international fashion consultant Suzan Azuma. "They wouldn't look at it in a moral sense."

As he pulled the CK ads last week, Klein insisted to NEWSWEEK that he was not trying to protect his other ventures. "That didn't enter into it," he said. David Geffen says he was against pulling the ads. "I thought it was giving in to a lot of hysteria about nothing. This is Elvis Presley's swinging hips being banned from TV and the movie 'Baby Doll' all over again. They thought that was going to corrupt children. Do we agree with this in retrospect? Of course not."

For all the fuss, the gesture was largely ceremonial. The TV spots were due to be retired next week; the print ads were going to run only until October. Both Klein and several retailers reported that the fuss had no impact on sales. Eight marketers contacted by NEWSWEEK all agreed that the whole arc of the campaign--the ads, the controversy, the contrite retraction--was a win-win proposition for Klein. "He comes out looking like a good guy," says Suzanne Grayson, a cosmetics consultant in Santa Barbara, Calif. "In the past he's disregarded what people have said and gone his own way. Here, people will say, 'He made a mistake and he fixed it.' When teenagers put pressure on parents to buy those jeans, the parents won't say, 'I can't live with the advertising, so I'm not buying them'."

Meanwhile, in the shopping malls of America, where teenagers like Julie Medina, 16, try on the different pieces of their evolving identities, values have a way of shaping themselves to their surroundings. As she prowled the Water Tower Place mall in Chicago last Tuesday, Julie had already clipped the ads from YM magazine and mounted them on her bedroom wall. "Everybody likes what he sells," said Julie. "How can anything be wrong with that?" In the Marshall Field's underwear department across the mall, Flequeshia Dixon, 19, a premed student and part-time model, said she has always dreamed of modeling for a Calvin Klein ad. "What he was trying to do" in the recent campaign, she explained, "was use the innocence of children, because a child's innocence is beautiful."

These are the children of Calvin: young, acquisitive and hyper-stylized, at play in fields of commercial overstimulation. They are millions strong in this country, and their numbers are growing-globally. And for better or worse, nothing--not scandal, not economics--comes between them and their Calvins.

                           RETAIL SALES          STORES

                           (IN BILLIONS)



Calvin Klein                  $1.9                 11

Polo Ralph Lauren             $4.4                120

Yves Saint Laurent            $2.8                120

Giorgio Armani                $1.7                188

"THEY DIDN'T GET IT' (INTERVIEW WITH CALVIN KLEIN)
In an exclusive interviews with Newsweek Michele Ingrassia last week, Calvin Klein spoke about the decision to withdraw the controversial CK jeans advertising campaign. Excerpts:

Why did you withdraw the ads?
It was a company decision. We talked with retailers and some of our business partners, we received letters and we made a judgment bout the campaign that it was completely misunderstood. It seemed pointless to continue something that was misunderstood and upsetting.

How many calls and letters have you gotten?
I don't know quantity, but it's not as dramatic as you're reading. It's more sensational when you read about it than when you're here.

Do you understand what made this series so objectionable?
I don't. In the past we've used the body to show underwear or a fragrance because those products are about the body... We did a fragrance ad with frontal nudity, and that is acceptable in some magazines. These people have more clothes on.... People didn't get that it's about modern young people who have an independent spirit and do the things they want to and can't be told or sold. None of that came through.

Do you see why some people call it pornographic?
I truly do not. I think there is nothing pornographic about them.

Your campaign by photographer Steven Meisel is strikingly similar to a spread he did for the Italian magazine L'Uomo Vogue in its May/June issue. Did one influence the other?
When you're working with [photographer] you have a good idea of what you might get. The inspiration here was not from previous campaign he's done [for others], but closely tied to previous campaign he did for us.

So you really didn't expect this sort of reaction?
Honest. I have been shocked. My intention was not to create a controversy, inspite of what some people think. This is a different time.

What do you see as the net gain or net loss for you?
Everything is selling as strong as before. I'm more concerned that the campaign was misunderstood. I'm not interested in fighting. I'm listening to what people are saying.

Will you do anything differently next time?
I will look very carefully at what we do. People we work with are given aide latitude because we want something creative. I have to look more closely--we all do--to be sure it doesn't happen again. My greatest concern is if kids misunderstood--and we really haven't heard from kids themselves. I really care. I have a daughter: I've raised a kid and I know the difficulties they go through and I don't want to add to that. We have to look at the ads and be aware of how they will influence them.

With Seema Nayyar in New York, Claudia Kalb in Chicago, Susan Miller in Miami, Marcus Mary in Paris and bureau reports.

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