Amidst speculations, LVMH has finally agreed to sell Donna Karan International to G-III Apparel Group Ltd. in a deal valuing the loss-making fashion brand at US $ 650 million. The deal is expected to close in late 2016 or early 2017, as said in a joint statement. G-III will gain the Donna Karan and DKNY brands, as per the deal.
Morris Goldfarb, Chairman, Chief Executive Officer and President of G-III averred, “Donna Karan International is an iconic global fashion company. Its lifestyle aesthetic resonates well with consumers throughout the world. We are excited to build upon its strong foundation as we seek to capitalize on a significant market opportunity. Donna Karan brings increased scale and diversification, while providing incremental growth on top of our portfolio of some of the best fashion brands in the world. We believe we are well positioned to create and sustain additional value for our shareholders, partners, and customers.”
However, industry analysts estimate DKNY’s annual sales at US $ 450-500 million, which means that G-III would be paying 1-1.5 times the annual revenue that will be less than the 1.9 times LVMH paid while buying the brand in year 2001.
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“Donna Karan International has a deep heritage, global recognition, and renewed energy. We believe the DKNY brand has a dynamic position in the market, and when G-III approached us about acquiring the brand, we concluded that the time was right and that G-III was the right steward going forward. We are pleased to have reached an agreement with G-III, a company that has the expertise and capabilities to broaden the brand’s distribution and take it to its next level of success,” said Toni Belloni, Group Managing Director of LVMH.
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