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                                                                    EXHIBIT 18.1

                       [LETTERHEAD OF ARTHUR ANDERSEN]


November 7, 1997

St. John Knits, Inc.
2722 Michelson Drive
Irvine, California 92715



Re:  Form 10-Q Report for the quarter ended August 3, 1997.


Ladies and Gentlemen:

This letter is written to meet the requirements of Regulation S-K calling for a
letter from a registrant's independent accountants whenever there has been a 
change in accounting principle or practice.

We have been informed that the Company changed its inventory valuation method 
from the last-in, first-out (LIFO) method to the first-in, first-out, (FIFO) 
method.  According to the management of the Company, this change was made for
the following reasons:

1.  Management has investigated several other public companies in the apparel
    industry and has determined that the FIFO method of inventory valuation is
    a more generally accepted accounting method in the industry.  Out of a total
    of seventeen public companies in the apparel industry investigated, sixteen
    utilize the FIFO method to value their inventories.  Included in this list
    are Donna Karan, Polo Ralph Lauren Enterprises, Gucci, Tommy Hilfiger and
    Jones Apparel Group, all of whom are considered to be most directly
    comparable to St. John Knits, Inc.

2.  The FIFO method effectively matches the Company's revenues and costs in
    the appropriate financial reporting period.  The frequency of the Company's
    inventory turns each year (five on average) has significantly reduced the
    impact of inflation on the valuation of inventory using the LIFO method.
    Inventory values essentially reflect current costs (FIFO), as most are
    replaced every two to three months.

3.  Practically, the time and effort spent by the Company utilizing the LIFO
    method has resulted in insignificant differences from the FIFO method.
    The Company's inventory has increased significantly since 1991, however the
    LIFO reserve has decreased from approximately $801,000 in 1991 to 
    approximately $363,000 in 1996.

4.  The Company's inventory production process has become more efficient in the
    past few years.  An increased reliance on automation has more than offset
    any effect of increased labor costs and therefore results in a decreasing
    impact of the difference between the LIFO method and the FIFO method.

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                        [LETTERHEAD OF ARTHUR ANDERSEN]


St. John Knits, Inc.
Page 2
November 7, 1997


5.  The overall effect of the change is immaterial to the Company's financial 
    statements.

We are of the opinion that the Company's change in method of accounting is to an
acceptable alternative method of accounting, which, based upon the reasons
stated for the change and our discussions with you, is more preferable under
your circumstances. In arriving at this opinion, we have relied on the business
judgment and business planning of your management.

We have not audited the application of this change to the financial statements
of any period subsequent to November 7, 1996. Further, we have not examined and
do not express any opinion with respect to your financial statements for the
nine months ended August 3, 1997.

Please feel free to contact us with any questions at (714) 757-3100.

Very truly yours

/s/ ARTHUR ANDERSEN LLP