Donna Karan, Sephora to sell in Stardoll Web world

By Michele Gershberg

NEW YORK (Reuters) - Young girls waiting to grow into full-time fashionistas will get a chance to experiment with couture as designer Donna Karan and cosmetics chain Sephora open shop in the virtual play-dress world of Stardoll.

Donna Karan's DKNY label and Sephora, both owned by French luxury goods conglomerate LVMH, will begin on Wednesday to offer virtual clothing and makeup to Stardoll members in specially designated online stores.

Stardoll's rapidly growing Web site has a large audience of teen girls who create Internet personas of themselves and spend hours dressing them up in fantasy costumes and socializing.

It is one of several popular online clubs for childish play -- such as Club Penguin and Gaia Online -- as well as the adult world's Second Life, that have drawn the interest of marketers for their audiences of devoted fans.

For Stardoll, however, the entry of two global brands could mark the start of a new advertising business on the site, which has grown to 6 million unique monthly visitors since being created in 2004. Until now, members could choose from eight fictional clothing labels created by the company's in-house designers.

"Our users have been craving for real brands on the site," Mattias Miksche, chief executive of privately held Stardoll, told Reuters. "We've been getting mail from our users from day one."

The company has compiled a list of the 100 brands most popular among its 10 million registered users, and is in talks with several companies on the list about building similar virtual shops on its site, he said.

Stardoll is also in talks with advertisers beyond the fashion and cosmetics industries who are also keen on reaching a concentrated audience of preteen and teenage girls.

"Our business model is selling virtual items for real money ... we have 26 different exchange rates," Miksche said. But if the site's virtual stores take off, creating links to real clothing purchases may not be far behind, he said.

While DKNY fashions are pricier in real life, dressing up an Internet alter-ego also costs real money. Members pay $1 in U.S. currency for 10 "star dollars" to spend on the site, and a virtual DKNY outfit of cargo pants, sequined tank top and pair of booties would cost 31 star dollars.

Stardoll is backed by venture capital firms Sequoia Capital and Index Ventures.