BIG CHANGE AT KARAN'S IS BY DESIGN.

Byline: Jennifer Steinhauer The New York Times

Donna Karan excels at many things. Now, she is going to focus on them.

Karan said Monday that she would step down as chief executive of her namesake company to concentrate on her role as chief designer, and that she had appointed John Idol, an executive from the Polo Ralph Lauren Corp., to the post of chief executive.

Idol, who is 38 and was a group president at Polo Ralph Lauren, in charge of clothing, home furnishings and product licensing, will move to Donna Karan International Inc. on Aug. 11. Karan will retain the title of chairwoman of the company.

Wall Street, which has hammered Donna Karan's stock, reacted Monday like an eager fashion audience at a runway show - shares of the company rose 12.6 percent, or $1.3125, to $11.75, on the New York Stock Exchange.

``As a designer she is unparalleled,'' said Faye Landes, an analyst at Smith Barney. ``Having her focus on that is good, as is the idea that they would bring someone in with expertise to move them along in the business.''

The choice of Idol is an interesting one. It would seem that Donna Karan is trying to draw some of the strengths of Ralph Lauren, another fashion company that went public last month, by tapping an expert in licensing, by far the most profitable segment of the Ralph Lauren business. Further, Donna Karan has effectively told Wall Street that the business of managing the bottom line will be quite separate from the business of cutting fabric.

Analysts say both of these things are essential for this fashion house: It could stem losses in certain divisions by licensing them, and discipline over budgets and company finances has never been the company's strong suit.

The appointment of Idol also sends a message about the respective roles of other executives. For example, Stephen L. Ruzow, the company's president and chief operating officer who has struggled to bring down costs, was widely believed to want the post; now he will report to Idol, who in turn will report to the board, not Karan.

Ruzow, who Wall Street believed was never given much power to make tough calls under Karan, said Monday that he was pleased with Idol's appointment. ``We finally have someone here who is empowered by the board to make decisions,'' he said.

CAPTION(S):

2 Photos

Photo: (1--Color) Designer Donna Karan, applauded after a show in New York, is stepping down as chief executive to focus on designing.

Associated Press

(2) John Idol

Leaving Polo Ralph Lauren