Donna Karan has been Sold to G-III For $650 Million By LVMH

Donna Karan

Last week rumors were that LVMH is going to sell Donna Karan to G-III. Well, the rumors are true. We just came to know that loss-making Donna Karan has been sold by LVMH to G-III for $650 million.

French luxury group LVMH Moët Hennessy Louis Vuitton, which is known as the world’s largest luxury fashion brand is going to sell fashion brand second time in its 30 years of life.

On this Monday we heard this shocking news by LVMH Moët Hennessy Louis Vuitton they have agreed to sell Donna Karan international for $650 million to G-III which is again a famous apparel group. G-III Apparel Group is an American manufacturing company; this company has owned Andrew Marc, Vilebrequin, and Bass. I addition to this G-III owns licenses for Ivanka Trump, Calvin Klein, and Tommy Hilfiger.

In 2005 first time in its history LMVH sold Christian Lacroix. In its history, this is the second time they are selling a fashion brand because Donna Karan is loss making.

This morning managing director of LMVH Antonio Belloni gave his statement to media saying that “G-III “has the expertise and capabilities to broaden the brand’s distribution and take it to its next level of success.”

He also said that they were not thinking about selling Donna Karan though it was loss making for them. But then a sale proposal was given to them by G-III and they gave a good enterprise value of Donna Karan which was good enough for VLMH. That’s why they decided to sell Donna Karan to G-III.

Pierre-Yves Roussel, who is the recent chairman and chief executive of LVMH Moët Hennessy Louis Vuitton said that, last week when news was leaked by some sources about the deal we received so many propositions by several good brands and companies for sale but we were looking for excellent buyer with good market value and high enterprise value of the Donna Karan. He gave interview on phone to a media channel saying that

“We wanted to sell to a strategic partner, not a private equity firm or other financial investor,” he said. “G-III is super-passionate about the brand.”

In fashion industry trend is very important and competition is very tough. You have to change and evolve with time according to change in fashion and competitors strategies. Last year a new fashion team was put together by top management to form new strategies for LMVH.

After this team was formed they analyzed the low performing units of LMVH. Donna Karan is one of low performing and loss-making business unit of LMVH. So looking at the broader vision and tough competition LMVH took the right decision to sell this loss-making unit to G-III for a huge enterprise worth.

Analyst Luca Solca shared his views about this huge business deal saying.

“Selling DKNY is a way to get rid of a problem, at a time when the market is tough and luxury companies would be right to show less leniency with underperforming businesses”

Donna Karan was founded in 1984; this brand was a market leader for professional working women wardrobe. Business was expanded to New York and they added a less expensive line of their products as well. But then with the passage of time business lost its identity because they lost touch with customers.

About the Author

Ahmad Jawad
My name is Ahmad and I'm a freelance writer, I writes articles on trending topics, I'm also a editor of NY Daily.

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