Business of Fashion: Why did LVHM sell Donna Karan?
LVMH, the french luxury conglomerate, known for housing brands such as Celine, Dior, Fend, Emilio Pucci, Givenchy, and more just sold Donna Karan to manufacturing and licensing company, G-III Apparel Group. Pierre-Yves Roussel confirms the sell due to an unsolicited offer at a high price and the brand’s poor fit placing with the group’s luxury business model.
In the last 18 months, LVHM has been restructuring the company by cleaning up multiple licensing deals and positioning the label around its lower-priced DKNY diffusion brand. Currently, the diffusion brand has the Public School design duo, Maxwell Osborne and Dao-Yi Chow as co-creative directors. Diffusion brands, differ with luxury brands by usually relying on ready-to-wear and wide wholesale distribution through department stores.
The G-III Apparel Group makes licensed clothing for brands like Tommy Hilfiger, Calvin Klein and Karl Lagerfeld, offered an evaluation of $650 million to the Donna Karan brand.
“We were not looking to sell it,” Roussel revealed to BoF in an interview. “We had moved the pieces in the right direction and I think we were starting to move forward… But [G-III] came with a very high price.”
Reflecting on the similarities between contemporary and luxury business models, Roussel continued: “That’s why there are a lot of luxury players, hiring contemporary and vice versa — designers doing one or the other, and so on because there are differences but also there is much more crossover, whereas diffusion is a different model.”