Rumors that LVMH was searching for a buyer for Donna Karan International (DKI) were confirmed yesterday, when news broke that New York City-based apparel company G-III had purchased the iconic American brand for $650 million. This is only the second time in LVMH’s history that it has sold off a fashion company – the last time being the sale of Christian Lacroix in 2005.
When Donna Karan stepped down from her namesake company in June 2015 after 30 years at the helm in order to focus on her philanthropic initiative, the Urban Zen Foundation, LVMH did not move immediately to find a replacement, nor did it set in place interim designers to carry the brand forward. Instead, Fall/Winter 2015 was to be Karan’s last collection, while DKNY was given over to Public School designers Maxwell Osborne and Dao-Yi Chow.
As Karan exited her brand, she lamented to the press that LVMH had been ignoring her struggling brand, saying, “I would love to work more with them, but Vuitton has given me the cold shoulder.” It appears that LVMH no longer believed in the product, but G-III has huge plans for a DKI revamp. While G-III owns licenses for Tommy Hilfiger, Karl Lagerfeld, and Calvin Klein, its ownership of DKI represents the apparel company’s biggest acquisition. Its ambitious plans for this new acquisition include doubling revenue to $700 million over the next three years by expanding into new product categories like footwear, handbags, intimates, childrenswear, and menswear.
G-III also spoke about resurrecting DKNY jeans and DKNYC as part of the expansion and repositioning strategy for the DKI brand. While over a year has passed since Karan stepped down from her company, G-III has plans to relaunch “very quickly”. G-III’s CEO, Morris Goldfarb, spoke to the press enthusiastically about the DKI takeover, sharing, “The opportunities on Donna Karan, the brand, are endless — it’s not distributed, it’s not licensed. We can only imagine how big that can be… [But] that will not be the billion-dollar business; the billion-dollar trophy for us, I believe, will be DKNY.”
There is no confirmation yet if Osborne and Chow will stay on at DKNY. However, given Goldfarb’s confidence and the untapped potential of a high-profile American brand that already has household name recognition, it appears the future at DKI is very bright indeed.