THIS WEEK ONLINE:

Oscar de la Renta at 80% Off, Alexis Bittar, Paul Smith, Moncler, Saint Laurent, Porsche Design, Diesel & More

SAMPLE CIRCUIT:

Bottega Veneta Returns To The Sale Scene
+
Sferra , Derek Lam, Isaia & Eidos

CHANGING HANDS:

LVMH Unloads Donna Karan International

DKNYSold
screen shot: DKNY.com

After a relatively brief period of intensive rumors, French fashion and beverage conglomerate LVMH has sold its Donna Karan International brand for$650 million to G-III Apparel Group, only marginally more than the $643 million it paid for the company in 2001.
The division had long been the subject of rumors, as the parent company had never been able to grow its two labels, the designer level Donna Karan New York and contemporary positioned DKNY, in any decisive way. Last year saw the departure of the company's namesake, designer Donna Karan, and the closure of the signature designer collection in favor of focusing on the more broadly distributed DKNY brand. The installation of acclaimed Public School designers Maxwell Osborne and Dao-Yi Chao to lead the label creatively was considered a bold move, but somewhat risky as the pair had made a splash in menswear but little relatively experience with women's apparel, especially in the highly commercial terrain that DKNY had always occupied. While LVMH has said it is happy with the results of the changes, others have reported a muted response to the new designs from customers. The two are still in the early stages of DKNY's revamp, having only shown two seasons for the label with the second, Fall 2016, just beginning to arrive in stores.
As for the buyer, G-III is one of America's most prominent apparel companies featuring a lengthy roster of owned, licensed and private label brands encompassing names ranging from Calvin Klein, Tommy Hilfiger and Karl Lagerfeld to Jessica Simpson and Alyssa Milano. It often manufactures and distributes part of a brand's offerings, such as women’s sportswear, suits, dresses, performance wear, handbags, luggage and cold weather accessories for Calvin Klein under license, for example, while it owns outright brands like Vilebrequin and G.H.Bass and, now, Donna Karan and DKNY. It also operates retail stores for many of its labels, giving it a breadth of expertise that is well suited to the DKNY business as well as a market clout that could prove useful in growing the brand.
What plans are in store for Donna Karan's labels remain to be announced. It is expected that Osborne and Chao will remain at least through the closing of the sale sometime early next year. While the Donna Karan Collection remains suspended for now, it seems unlikely that G-III would be quick to revive it, as higher end designer apparel is somewhat outside the company's wheelhouse. In addition, LVMH leaders have long been rumored to be frustrated by designer Donna Karan's increasing attention to her personally owned lifestyle brand Urban Zen, which has already begun to appear in stores like Bergdorf Goodman as a replacement for the departed Donna Karan Collection. The Donna Karan Collection brand is not fully absent from the market with licensed home, hosiery, intimate apparel and fragrance collections ongoing, and items from the designer's final, Fall 2015 collection still available for purchase at DonnaKaran.com.
What is most unusual for LVMH is the selling of the division at all. The parent company is known for sticking by its owned designer brands until it finds the right creative approach to achieve commercial traction, often going through a succession of designers at brands like Céline, Loewe and even Givenchy over several years before hitting on a winning formula. This time, LVMH decided to walk away with little profit to show after 15 years, which may be either the exception that proves the rule or a signal of a new, less patient approach at one of the fashion industry's biggest players. At the very least, the sale now puts one of America's iconic fashion brands back in the hands of an American company, with a new, as yet unknown future ahead of it.

(WWD)

Comments

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)