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                                                                   EXHIBIT 10.1

                                                                  EXECUTION COPY


                                SEVENTH AMENDMENT

                            Dated as of June 21, 2001

                  This SEVENTH AMENDMENT (the "Seventh Amendment") among The
Donna Karan Company, a New York general partnership, The Donna Karan Company
Store, G.P., a New York general partnership, Donna Karan Studio, a New York
general partnership, and DK Footwear Partners, a New York general partnership
(collectively, the "Borrowers"), the financial institutions from time to time
parties thereto as lenders (the "Lenders"), the financial institutions from time
to time parties thereto as issuing banks (the "Issuing Banks"), Citibank, N.A.,
in its capacity as administration agent for the Lenders and the Issuing Banks
(the "Administrative Agent"), The Chase Manhattan Bank and Bank of America, N.A.
(formerly known as NationsBank, N.A.), in their capacity as co-agents (the
"Co-Agents").

                             PRELIMINARY STATEMENTS:

                  (1) The Borrowers, the Lenders, the Issuing Banks, the
Co-Agents and the Administrative Agent have entered into a Second Amended and
Restated Credit Agreement dated as of January 29, 1998, as amended from time to
time (as so amended, the "Credit Agreement"). Unless otherwise defined herein,
the terms defined in the Credit Agreement shall be used herein as therein
defined.

                  (2) The Borrowers and the Lenders have agreed to amend the
Credit Agreement as hereinafter set forth.

                  SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 2 hereof, hereby amended as
follows:

                  (a) The definition of "Acceptance Termination Date" set forth
         in Section 1.01 of the Credit Agreement is amended by deleting such
         definition in its entirety and substituting therefor the following:

                           "'ACCEPTANCE TERMINATION DATE' means the day which is
                           the earliest of (i) January 31, 2003, provided that
                           if the LVMH Acquisition is consummated such date will
                           be August 15, 2001, (ii) the termination of the
                           Commitments pursuant to SECTION 11.02(a), (iii) the
                           date of termination in whole of the Domestic
                           Commitments pursuant to SECTION 3.01(a) and (iv) the
                           date of the termination of the Acceptance Commitment
                           pursuant to SECTION 2.04(l)."


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                  (b) The definition of "Applicable Fixed Rate Margin" set forth
         in Section 1.01 of the Credit Agreement is amended by deleting such
         definition in its entirety and substituting therefor the following:

                           "'APPLICABLE FIXED RATE MARGIN' means a rate equal to
                           2.50% per annum."

                  (c) The definition of "Applicable Floating Rate Margin" set
         forth in Section 1.01 of the Credit Agreement is amended by deleting
         such definition in its entirety and substituting therefor the
         following:

                           "'APPLICABLE FLOATING RATE MARGIN' means a rate equal
                           to 1.50% per annum."

                  (d) The definition of "Borrowing Base" in Section 1.01 of the
         Credit Agreement is amended by deleting such definition in its entirety
         and substituting therefor the following:

                           "'BORROWING BASE' means, as of any date of
                           determination, an amount equal to the sum of (a) up
                           to ninety percent (90%) of Eligible Receivables that
                           are Credit Insured Receivables or are backed by a
                           letter of credit acceptable to the Administrative
                           Agent (which letter of credit has been assigned to
                           the Administrative Agent) LESS such reserves as the
                           Administrative Agent, in its sole discretion, deems
                           appropriate PLUS (b) up to eighty percent (80%) of
                           Eligible Receivables (other than those Eligible
                           Receivables described in clause (a) of this
                           definition) LESS such reserves as the Administrative
                           Agent, in its sole discretion, deems appropriate PLUS
                           (c) up to fifty percent (50%) of Eligible Inventory
                           under Acceptable Documentary Letters of Credit LESS
                           such reserves as the Administrative Agent, in its
                           sole discretion, deems appropriate PLUS (d) up to
                           sixty percent (60%) of Eligible Finished Goods
                           Inventory, PROVIDED that the amount of the Borrowing
                           Base allocated to the Eligible Finished Goods
                           Inventory stored in the warehouses located in
                           Oldenzaal, Holland shall not exceed $7,000,000 in the
                           aggregate, LESS such reserves as the Administrative
                           Agent, in its sole discretion, deems appropriate PLUS
                           (e) up to thirty percent (30%) of Eligible Raw
                           Materials LESS such reserves as the Administrative
                           Agent, in its sole discretion, deems appropriate. The
                           Administrative Agent, in its sole discretion, based
                           on such credit and collateral considerations as the
                           Administrative Agent may deem appropriate, may change
                           from time to time the advance rates in clauses (a),
                           (b), (c), (d) and (e) above, PROVIDED that such
                           advance rates do not at any time exceed the
                           respective percentages set forth above."

                  (e) The definition of "Commitment Termination Date" set forth
         in Section 1.01 of the Credit Agreement is amended by deleting such
         definition in its entirety and substituting therefor the following:

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                           "'COMMITMENT TERMINATION DATE' means the day which is
                           the earliest of (A) May 1, 2003, provided that if the
                           LVMH Acquisition is consummated such date will be
                           November 15, 2001, (B) the termination of the
                           Commitments pursuant to SECTION 11.02(a) and (C) the
                           date of termination in whole of the Commitments
                           pursuant to SECTION 3.01(a)."

                  (f) The definition of "Loans" set forth in Section 1.01 of the
         Credit Agreement is amended by deleting such definition in its entirety
         and substituting therefor the following:

                           "'LOANS' means all Revolving Loans, Tranche B Loans
                           and Swing Loans."

                  (g) Section 1.01 of the Credit Agreement is amended by adding
         a new definition after "Lockboxes" and before "Margin Stock" to read as
         follows:

                           "'LVMH ACQUISITION' means the acquisition of Donna
                           Karan International by LVMH Moet Hennessey Louis
                           Vuitton, Inc. as set forth in the Preliminary Proxy
                           Statement filed by Donna Karan International with the
                           SEC on May 17, 2001."

                  (h) Section 1.01 of the Credit Agreement is amended by adding
         a new definition after "Termination Event" and before "Transaction
         Costs" to read as follows:

                           "'TRANCHE B LOAN' has the meaning ascribed to such
                           term in Section 2.01A(a)."

                  (i) Section 1.01 of the Credit Agreement is amended by adding
         a new definition after "Termination Event" and before "Tranche B
         Termination Date" to read as follows:

                           "'TRANCHE B AMOUNT' means (i) during the month of
                           June 2001, $15,000,000; (ii) during the month of July
                           2001, $20,000,000; (iii) during the month of August
                           2001, $5,000,000."

                  (j) Section 1.01 of the Credit Agreement is amended by adding
         a new definition after "Tranche B Amount" and before "Transaction
         Costs" to read as follows:

                           "'TRANCHE B TERMINATION DATE' means August 31, 2001."

                  (k)      Article II of the Credit Agreement is amended by
         adding a new Section after Section 2.01 to read as follows:

         "2.01A.  THE TRANCHE B FACILITY.


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                  (a) TRANCHE B LOANS. Subject to the terms and conditions set
         forth herein, (i) each Lender hereby severally and not jointly agrees
         to make loans (each a "TRANCHE B LOAN") to the Borrowers in Dollars
         from time to time on any Business Day during the period from the
         Closing Date to the Tranche B Termination Date, in an aggregate amount
         not to exceed at any time outstanding such Lender's Pro Rata Share of
         the Tranche B Amount; PROVIDED, however, in no event shall the
         outstanding amount of the Tranche B Loans, when added to the sum of (i)
         the Revolving Credit Obligations at such time PLUS (ii) the amount of
         the Foreign Exchange Exposure at such time PLUS (iii) the amount of the
         Obligations at such time attributable to corporate credit cards or cash
         management functions including Automated Clearing House (ACH) functions
         performed by Citibank, exceed the amount of the Commitments. All
         Tranche B Loans comprising the same Borrowing hereunder shall be made
         by the Lenders simultaneously and proportionately to their then
         respective Pro Rata Shares. Subject to the provisions hereof, any
         Borrower may repay any out standing Tranche B Loan on any day which is
         a Business Day and any amounts so repaid may be reborrowed, up to the
         amount available under this SECTION 2.01A(A) at the time of such
         Borrowing, until the Tranche B Termination Date. Each Borrowing shall
         be denominated in Dollars.

                  (b) NOTICE OF BORROWING IN RESPECT OF LOANS UNDER THE TRANCHE
         B FACILITY. When a Borrower desires to make a Borrowing under this
         SECTION 2.01A, it shall deliver to the Administrative Agent a signed
         Notice of Borrowing no later than 11:00 a.m. (New York time) on the
         proposed Funding Date for such Borrowing. In lieu of delivering such a
         Notice of Borrowing, a Borrower may give the Administrative Agent
         telephonic notice of any proposed Borrowing by the time required under
         this SECTION 2.01A(b) if it confirms such notice by delivery of the
         Notice of Borrowing to the Administrative Agent promptly, but in no
         event later than 5:00 p.m. (New York time) on the same day. Any Notice
         of Borrowing (or telephonic notice in lieu thereof) given pursuant to
         this SECTION 2.01A(b) shall be irrevocable. All Loans made under this
         SECTION 2.01A shall be Floating Rate Loans.

                  (c) MAKING OF TRANCHE B LOANS. (i) In the event any portion of
         the Loans requested in any Notice of Borrowing delivered to the
         Administrative Agent pursuant SECTION 2.01A(b) will be made as Tranche
         B Loans, the Administrative Agent shall promptly notify each Lender of
         the amount of such Borrowing. Each such Lender shall deposit an amount
         equal to its Pro Rata Share of the amount of such Borrowing with the
         Administrative Agent in the applicable Payment Account in immediately
         available funds, not later than 3:00 p.m. (New York time), on any
         Funding Date applicable thereto. Subject to the satisfaction of the
         conditions precedent set forth in SECTION 5.02, the Administrative
         Agent shall make the proceeds of such amounts received by it

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         available to the applicable Borrower at the Administrative Agent's
         office in New York, New York, on such Funding Date (or as soon
         thereafter as is customarily practicable) and shall disburse such
         proceeds to the applicable Disbursement Account.

                      (ii) The failure of any Lender to deposit the amount
         described in CLAUSE (I) above with the Administrative Agent on the
         applicable Funding Date shall not relieve any other Lender of its
         obligations hereunder to make its Tranche B Loan on such Funding Date.
         No Lender shall be responsible for any failure by any other Lender to
         perform its obligation to make a Tranche B Loan hereunder nor shall the
         Commitment of any Lender be increased or decreased as a result of any
         such failure.

                      (iii) Unless the Administrative Agent shall have been
         notified by any Lender prior to 1:00 p.m. (New York time) on any
         applicable Funding Date that such Lender does not intend to fund its
         Tranche B Loan requested to be made on such Funding Date, the
         Administrative Agent may assume that such Lender has funded its Tranche
         B Loan and is depositing the proceeds thereof in the applicable Payment
         Account on the Funding Date, and the Administrative Agent in its sole
         discretion may, but shall not be obligated to, disburse a corresponding
         amount to the applicable Borrower on the Funding Date. If the Tranche B
         Loan proceeds corresponding to that amount are advanced to such
         Borrower by the Administrative Agent but are not in fact deposited with
         the Administrative Agent by such Lender on or prior to the applicable
         Funding Date, such Lender agrees to pay, and in addition such Borrower
         agrees to repay, to the Administrative Agent forthwith on demand such
         corresponding amount, together with interest thereon, for each day from
         the date such amount is disbursed to or for the benefit of such
         Borrower until the date such amount is paid or repaid to the
         Administrative Agent, (A) in the case of such Bor rower, at the
         interest rate applicable to such Borrowing and (B) in the case of such
         Lender, at the Interbank Rate for the first Business Day, and
         thereafter at the interest rate applicable to such Borrowing. If such
         Lender shall pay to the Administrative Agent the corresponding amount,
         the amount so paid shall constitute such Lender's Tranche B Loan, and
         if both such Lender and such Borrower shall pay and repay such
         corresponding amount, the Administrative Agent shall promptly pay to
         such Borrower such corresponding amount (together with any interest
         included in such payment). This SECTION 2.01A(C)(III) does not relieve
         any Lender of its obligation to make its Tranche B Loan on any Funding
         Date.

                  (d) REPAYMENT OF TRANCHE B LOANS. Notwithstanding anything
         contained in this Agreement to the contrary, any principal payment of
         the Loans hereunder shall be applied (i) first, to repay the Tranche B
         Loans, until the

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         outstanding amount of the Tranche B Loans are repaid in full; (ii)
         second, to repay Swing Loans, until the outstanding amount of the Swing
         Loans are repaid in full; and (iii) third, to repay Revolving Loans,
         until the outstanding amount of the Revolving Loans are repaid in full.

                  (e) TRANCHE B TERMINATION DATE. The Commitments to make
         Tranche B Loans shall terminate, and all outstanding Tranche B Loans
         shall be Paid In Full on the Tranche B Termination Date in accordance
         with SECTION 3.02(A)."

                  (l) Subsection (a) of Section 7.02 of the Credit Agreement is
         amended by deleting such Subsection in its entirety and substituting
         therefor the following:

                           "(a) The Borrowers shall provide the Administrative
                           Agent and each Lender with a Borrowing Base
                           Certificate, certified as being true and correct by
                           the Borrowers' chief financial officer, controller or
                           any other officer acceptable to the Administrative
                           Agent, on the seventh Business Day following the last
                           day of each fiscal month, or more frequently if
                           requested by the Administrative Agent, provided that
                           during the period from the date hereof to November 1,
                           2001 the Borrowers shall provide to the
                           Administrative Agent and each Lender such Borrowing
                           Base Certificate on the seventh Business Day
                           following the last day of each week. Each subsequent
                           Borrowing Base Certificate shall be based upon, with
                           respect to Receivables and Inventory, information as
                           of the last day of the immediately preceding month or
                           week, as the case may be. Each such Borrowing Base
                           Certificate shall set forth Borrowing Base
                           calculations since the date of the last prior
                           Borrowing Base Certificate and shall include a weekly
                           summary aging of Receivables, a weekly schedule of
                           each category of Eligible Inventory and all Eligible
                           Inventory that has become ineligible, specifying the
                           applicable category of ineligibility and such other
                           information as the Administrative Agent may request
                           from time to time."

                  (m)      Section 11.01 of the Credit Agreement is amended by
         adding a new subsection (q) to read as follows:

                           "LVMH ACQUISITION. If the LVMH Acquisition has not
                           been consummated by November 15, 2001."

                  SECTION 2. CONDITIONS OF EFFECTIVENESS. Section 1 of this
Seventh Amendment shall become effective (i) when the Administrative Agent shall
have received counterparts of this Seventh Amendment executed by the Borrowers
and the Lenders and (ii) the Borrowers shall have paid to the Administrative
Agent, for the ratable benefit of the Lenders, a fee in the amount of seventy
five basis points on $40,000,000.

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                  SECTION 3. AMENDMENTS TO CREDIT AGREEMENT. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 4 hereof, hereby amended as
follows:

                  (a) The definition of "Change of Control" set forth in Section
         1.01 of the Credit Agreement is amended by adding at the end thereof
         the following:

                           "Notwithstanding the foregoing, the definition of
                           "CHANGE OF CONTROL" shall not include the LVMH
                           Acquisition."

                  SECTION 4. CONDITIONS OF EFFECTIVENESS. Section 3 of this
Seventh Amendment shall become effective when the Administrative Agent shall
have received counterparts of this Seventh Amendment executed by the Borrowers
and the Requisite Lenders.

                  SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.
Each Borrower represents and warrants as follows:

                  (a) After giving effect to this Seventh Amendment, all of the
         representations and warranties contained in Section 6.01 of the Credit
         Agreement and in the other Loan Documents shall be true in all material
         respects.

                  (b) After giving effect to this Seventh Amendment, no Default
         or Event of Default shall have occurred and be continuing.

                  SECTION 6. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. (a)
Upon the effectiveness of Section 1 and/or Section 3 of this Seventh Amendment,
on and after the date hereof each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents to "the Credit
Agreement", "thereunder", "thereof" or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby.

                  (b) Except as specifically amended above, the Credit Agreement
and all other Loan Documents, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed. Without limiting
the generality of the foregoing, the Loan Documents and all of the Collateral
described therein do and shall continue to secure the payment of all obligations
of the Borrowers under the Credit Agreement, the Notes and the other Loan
Documents, in each case as amended hereby.

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                  (c) The execution, delivery and effectiveness of this Seventh
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.

                  SECTION 7. EXECUTION IN COUNTERPARTS. This Seventh Amendment
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.

                  SECTION 8. GOVERNING LAW. This Seventh Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York.


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                  IN WITNESS WHEREOF, the parties hereto have caused this
Seventh Amendment to be executed as of the date first above written.

                                         THE DONNA KARAN COMPANY

                                         By:   Donna Karan International Inc.,
                                               a general partner


                                               By:______________________________
                                                  Title:________________________


                                         DONNA KARAN STUDIO

                                         By:   Full Requirements Merchandising,
                                               Inc., a general partner


                                               By:______________________________
                                                  Title:________________________


                                         THE DONNA KARAN COMPANY STORE, G.P.

                                         By:   Donna Karan International Inc.,
                                               a general partner


                                               By:______________________________
                                                  Title:________________________


                                         DK FOOTWEAR PARTNERS

                                         By:   Donna Karan International Inc.,
                                               a general partner


                                               By:______________________________
                                                  Title:________________________



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                                         CITIBANK, N.A., as Administrative Agent
                                         and Lender



                                         By:____________________________________
                                            Vice President


                                         THE CHASE MANHATTAN BANK, as Co-Agent
                                                   and Lender


                                         By:____________________________________
                                         Title:


                                         BANKAMERICA BUSINESS CREDIT, as
                                                  Co-Agent and Lender


                                         By:____________________________________
                                         Title:


                                         PNC BUSINESS CREDIT


                                         By:____________________________________
                                         Title:


                                         THE CIT GROUP/COMMERCIAL SERVICES, INC.



                                         By:____________________________________
                                         Title:

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                                         NATIONAL CITY COMMERCIAL FINANCE, INC.



                                         By:____________________________________
                                         Title:


                                         JACKSON NATIONAL LIFE INSURANCE CO.,
                                         By:  PPM FINANCE, INC., its
                                              Attorney-in-Fact



                                         By:____________________________________
                                         Title:


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