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"DKNY" was launched as a second line of Donna Karen in 1989. The DKNY line was designed to provide stylish, casual, and affordable clothing for a less elite market segment. The apparel was still relatively expensive but it brought an entirely new and much broader range of buyers to Karan designs. The line, which was craftily marketed on a background of black-and-white cityscapes that enhanced its urban nature, was one of the most successful launches in fashion history. DKNY helped the fashion firm generate about $115 million in sales for 1989.

The first DKNY flagship store opened in 1999 at Madison Avenue and 60th in New York.