LVMH divests Donna Karan International for US$650 million

USA. LVMH Moët Hennessy Louis Vuitton (LVMH) has reached a definitive agreement to sell Donna Karan International, parent company of the Donna Karan and DKNY brands, to G-III Apparel Group for an enterprise value of US$650 million.

G-III Apparel Group is a prominent designer, manufacturer and marketer of branded apparel and accessories. The transaction is expected to close in late 2016 or early 2017.

Reuters cited analysts’ estimates of DKNY’s annual sales at US$450 million to US$500 million. That means G-III will be paying 1-1.5 times annual revenue, less than the 1.9 times LVMH paid when it bought the brand in 2001, the agency said.

It commented: “The sale comes just over a year after a new design team had been put in place, showing how little patience LVMH has for underperforming businesses in the current tough trading environment.”

LVMH Group Managing Director Toni Belloni said: “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.”

G-III Chairman, Chief Executive Officer and President Morris Goldfarb said: “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 capitalise 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.”

G-III traces its roots back to 1956 when Aron Goldfarb, a Holocaust survivor, immigrated to the USA and established his own outerwear company.

In August 2012, G-III acquired Vilebrequin, a leading global provider of swimwear, accessories and resort wear. Vilebrequin sells its products through a large network of company owned and franchised specialty retail stores and shops, as well as through select wholesale distribution. G-III believes that Vilebrequin is a powerful brand and expects to add more company owned and franchised retail locations, increase wholesale distribution around the world and develop the business beyond its heritage in men’s swimwear, accessories and resort wear. This addition provides G-III with a premier brand selling status products worldwide.

G-III’s most recent acquisition took place in November 2013, when the company purchased G.H. Bass, a timeless heritage footwear brand that was founded in 1876. G.H. Bass is known as the original creator of the penny loafer.

Today it has a portfolio of over 30 licensed and proprietary brands, including Calvin Klein, Kenneth Cole, Cole Haan, Guess?, Tommy Hilfiger, Levi’s, Dockers, Jessica Simpson, Vince Camuto, Ellen Tracy, Kensie, Mac & Jac, Jones New York, Ivanka Trump, Nine West, Vilebrequin and G.H. Bass.

Food & Beverage The Magazine eZine