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                                                                  Exhibit 10.4

                           Terms of Interim Employment
                                Giuseppe Brusone

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Title:                      President and Chief Executive Officer; Mr. Brusone
                            shall be subject to the direction and authority of
                            the Company's Board of Directors.

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Term:                       Mr. Brusone's employment shall be "at will",
                            terminable by either party, with or without cause.
                            Mr. Brusone shall not be entitled to any severance
                            payment in the event of the termination of his
                            employment for any reason.

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Salary:                     U.S.$58,333.33 monthly, payable in installments in
                            accordance with the regular payroll schedule of the
                            Company.

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Bonus:                      At the discretion of the Company's Board of
                            Directors.

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Benefits:                   Mr. Brusone shall be entitled to, when eligible,
                            participate in all plans and benefits generally
                            accorded to senior executives of the Company,
                            including, but not limited to, pension,
                            profit-sharing, supplemental retirement, incentive
                            compensation, bonus, vacation, disability income,
                            group life, medical and hospitalization insurance
                            and similar or comparable plans.

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Confidentiality:            All Confidential Information shall be the exclusive
                            property of the Company. Mr. Brusone shall, during
                            the term of his employment with the Company and at
                            all times following the termination of such
                            employment, keep all Confidential Information
                            confidential and shall not use or disclose any
                            Confidential Information to any person not employed
                            by the Company or any of its subsidiaries without
                            the prior written authorization of the Company,
                            except as he may be required by the Merger Agreement
                            to disclose the same to LVMH and except further as
                            required by law, court order or governmental demand,
                            provided that Mr. Brusone has given the Company (and
                            the Chairman of the Special Committee) prompt
                            written notice that he believes he is required by
                            law, court order or governmental demand to disclose
                            same so that the Company has had reasonable
                            opportunity to seek a protective order or other
                            appropriate remedy.

                            "CONFIDENTIAL INFORMATION" means, in addition to its
                            meaning under applicable law, information which is
                            not generally known in the Company's industry, which
                            is proprietary to the Company and which is subject
                            to efforts by the Company to maintain its
                            confidentiality, including (i) trade secret
                            information about the Company and its products; and
                            (ii) information relating to the business of the
                            Company as conducted at the time Mr. Brusone is
                            employed and during the term of his employment, and
                            to any of its current or anticipated products,
                            including, without limitation, information about the
                            Company's designs, purchasing, accounting,
                            marketing, selling, or servicing. Confidential
                            Information does not include, however, information
                            which (a) is or becomes generally available to the
                            public other than as a result of a disclosure by Mr.
                            Brusone in violation of the terms of this agreement,
                            (b) was available to Mr.
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                            Brusone on a nonconfidential basis prior to its
                            disclosure by the Company during Mr. Brusone's
                            employment, (c) becomes available to Mr. Brusone on
                            a nonconfidential basis from a person other than the
                            Company who is not known by Mr. Brusone to be bound
                            by a confidentiality agreement with the Company or
                            to otherwise be under a contractual, legal or
                            fiduciary obligation to the Company not to transmit
                            the information to Mr. Brusone, (d) is independently
                            developed by Mr. Brusone without the use of
                            Confidential Information or (e) which LVMH or any of
                            its affiliates otherwise has a right to obtain or
                            possess under the License Agreement dated June 3,
                            1996, between Gabrielle Studio, Inc. and Donna Karan
                            Studio, subject to the terms thereof.

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No Solicitation:            Without the Company's prior written consent, Mr.
                            Brusone will not, for the twelve (12) month period
                            following the termination of Mr. Brusone's
                            employment with the Company (the "RESTRICTED
                            PERIOD"), directly or indirectly solicit for
                            employment or employ any person now employed by the
                            Company or any of the Company's subsidiaries, who is
                            currently eligible for annual bonus (approximately
                            80 persons); provided, however, that the employees
                            covered by the foregoing shall not include (i) Donna
                            Karan, (ii) up to six additional employees, which
                            employees have been previously identified to William
                            Benedetto by letter dated February 7, 2001, if Donna
                            Karan elects to terminate her employment with the
                            Company not in breach of her current employment
                            agreement and is employed by LVMH or an affiliate
                            not in breach of her current employment agreement
                            and (iii) persons who contact Mr. Brusone in
                            response to general public media solicitation
                            materials.

                            In addition, during the Restricted Period, Mr.
                            Brusone shall not solicit any of the Company's
                            customers on behalf of himself, LVMH or any of its
                            affiliates, or any other business or entity in
                            competition with the business then conducted by the
                            Company; provided, however, that in no event shall
                            the foregoing restriction prohibit Mr. Brusone from
                            soliciting customers of the Company that are also
                            customers of LVMH or any of its affiliates.

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                                         DONNA KARAN INTERNATIONAL INC.


                                         By:
                                            ------------------------------------
                                            Name:
                                            Title:


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                                         Giuseppe Brusone