Marilyn Still Turning Heads

12/16/1998 at 12:00 AM EST

Marilyn Monroe's form-fitting, flesh-colored gown -- a sequined stunner she wore to sing "Happy Birthday" to President Kennedy in 1962 -- sold Wednesday for a record $1.26 million. The dress was the highest-priced item sold at the first session of a two-day Manhattan auction. The crowd cheered loudly when the winning bid, from the Manhattan-based company Gotta Have It! Collectibles, was announced. It set a new record for an auctioned dress, obliterating the $222,500 paid for an ink-blue Princess Diana gown sold in 1997. Asked why the company spent a small fortune on the dress, Gotta Have It! co-owner Robert Schargin told reporters, "Because it wasn't $3 million, which we thought it was worth . . . We stole it."