DKNY: LVMH throws in towel, G-III picks it up

DKNY advertising SS16So LVMH is selling DKNY to G-III Apparel with G-III’s CEO calling DKNY “iconic” and LVMH’s MD saying the “time was right”. Apart from that opening sentence probably containing more initial letters than any I’ve written in my entire life, there’s no actual surprise there.

The fact is that the US-based Donna Karan business never quite sat comfortably in the European LVMH luxury set-up. As soon as LVMH decided to drop the higher-end Donna Karan label, the urban DKNY line stood out even more like a sore thumb and felt a little like it was going nowhere, even though it had accounted for 80% of Donna Karan’s sales.

LVMH doesn’t tend to sell-off its brands (the last time it offloaded a major name fashion brand was 2005 when it sold Christian Lacroix). But there’s a tradition of giant apparel conglomerates taking over American designer brands and making a go of them. Just look at PVH, which owns Calvin Klein and Tommy Hilfiger. And it’s significant that G-III also holds major licenses for those two brands.

So, G-III obviously thinks it can take DKNY to new heights – in its day the label was, after all, a trailblazer in the lower-priced designer segment.

DKNY advertising SS16It seems the company approached LVMH with a deal (the transaction has an enterprise value of $650m) because, as CEO Morris Goldfarb said: “Its lifestyle aesthetic resonates well with consumers throughout the world”. He added that it “brings increased scale and diversification, while providing incremental growth on top of our portfolio. We believe we are well positioned to create and sustain additional value for our shareholders, partners, and customers.”

LVMH’s group MD Antonio Belloni said: “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.

“We are grateful to CEO Caroline Brown, creative directors Maxwell Osborne and Dao-Yi Chow, and the entire management and design teams for the strategic actions that created a platform to support DKNY’s continued growth.” Apparently, that trio of execs will be staying on.

DKNY advertising SS16The Donna Karan brand launched in 1984 so being the age I am, I’ve always had a soft spot for it. In my 20s, I spent a lot of time copying those jersey bodysuits and wrapped and knotted sarong skirts. But after going public in 1996 it faced challenges and the $643m sale to LVMH in 2001 that looked like a new start turned out to be that beginning of a period in which its sales trod water.

Donna Karan herself had an uneasy time in her relationship with LVMH and eventually stopped back to focus on her Urban Zen wellness products. That left Marc Jacobs as LVMH’s remaining American brand, but we’re not sure how well that one is doing either.

The company folded its lower-priced ‘Marc by…’ label into the parent brand a while back but all LVMH said about both Karan and Jacobs at its last results announcement  was that it continued “to work on the evolution of their product lines.”

Let’s hope DKNY ’s evolution starts here.

One thought on “DKNY: LVMH throws in towel, G-III picks it up

  1. Pingback: LVMH results: Marc Jacobs not for sale, French fashion market tough, beauty better |

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