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                                                                   Exhibit 10.25


                     AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT

               This AMENDMENT NO. 2 ("Amendment"), dated as of the 1st day of
November, 1999, by and between DONNA KARAN INTERNATIONAL INC., a Delaware
corporation having an office at 550 Seventh Avenue, New York, New York 10018
(the "Company"), and DONNA KARAN (the "Executive").

                               W I T N E S S E T H

               WHEREAS, the Company and the Executive are parties to that
certain Employment Agreement, dated as of the 3rd day of July, 1996, which was
amended by Amendment No. 1 dated as of the 25th day of July, 1997 (such
agreement, as amended, the "Agreement"); and

               WHEREAS, the Company and the Executive wish to amend further the
Agreement on the terms and conditions set forth herein;

               NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, it is hereby agreed as
follows:

                  1. AMENDMENT OF SECTION 6(a). Section 6(a) of the Agreement is
hereby amended and restated to read in its entirety as follows:

                      (a) pay to Executive a base salary at the rate of $500,000
                      per annum, such amount to be paid in equal installments on
                      the Company's regular payroll dates; PROVIDED, HOWEVER,
                      that for the period commencing November 1, 1999 through
                      the earlier of the termination of this Agreement or
                      December 31, 2001, the Company shall pay to Executive a
                      base salary at the rate of $100,000 per annum. In years
                      subsequent to 1996, such salary shall be adjusted by the
                      percentage increase in the Consumer Price Index for all
                      Urban Customers ("CPI-U") for the month of November
                      immediately preceding the relevant annual period over the
                      CPI-U of the preceding annual period. The "CPI-U" referred
                      to herein is that CPI-U published by the Bureau of Labor
                      Statistics, U.S. Department of Labor, for all United
                      States cities (U.S. city average), based upon 1982-4
                      equaling 100, or the successor or supplement thereto if
                      publication thereof should be discontinued or modified.

                  2. ACKNOWLEDGMENT. Executive hereby expressly acknowledges and
agrees that the changes in her base salary as set forth in this Amendment does
not constitute "good reason" as set forth in Section 9(b)(iii) of the Agreement.


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                  3. SEPARABILITY. In the event that any provision or any
portion of any provision of this Amendment shall be held to be void or
unenforceable, the remaining provisions of this Amendment (and the balance of
any provisions held void or unenforceable in part only) shall continue in full
force and effect.

                  4. ENTIRE AGREEMENT. This Amendment, together with the
Agreement (as amended hereby), contains the full and complete understanding and
agreement of the parties with respect to the subject matter hereof and
supercedes all prior agreements and understandings between the parties with
respect to the subject matter hereof.

                  5. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of law provisions thereof.

                  6. THE AGREEMENT. Except as expressly set forth herein, all
other provisions of the Agreement shall remain in full force and effect.

               IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.


                                    DONNA KARAN INTERNATIONAL INC.


                                      By: /s/ John D. Idol
                                          --------------------------------
                                          Name: John D. Idol
                                          Title:  Chief Executive Officer



                                           /s/ Donna Karan
                                           -------------------------------
                                           DONNA  KARAN


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