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When the Calvin Klein underwear business, which Wachner bought outright in 1994, began to mature in the late '90s, Wachner's aggressiveness started to look like a liability. In an attempt to make quarterly numbers, many, including Klein, believe she flooded stores with steeply marked-down merchandise. The eroding economy did the rest.
Despite being pummeled into bankruptcy, Warnaco's brands still have great value. That--and the fact that they are already in deep--is one of the reasons the banks have loaned Warnaco even more money. But if the bankruptcy court decides to sell off assets, rivals such as VF Corp., Kellwood, Jones Apparel and Sara Lee would be potential buyers. Although technically abrogated by the Chapter 11 filing, the Calvin Klein license, at least for the moment, will probably stay with Warnaco until the judge rules on it. So too, most likely, will Wachner. Her contract includes an estimated $25 million golden parachute. Which only goes to show that while fashions may come and go, some things in corporate America never go out of style.
--With reporting by Carole Buia/New York