LVMH to sell Donna Karan in $650-mn deal

For only the second time in its almost 30-year history, Moët Hennessy Louis Vuitton (LVMH), the largest luxury conglomerate in the world, is selling a fashion brand.

On Monday, the French company said that it had agreed to sell Donna Karan International to G-III Apparel Group, the American manufacturing and licensing company that owns Andrew Marc, Vilebrequin and Bass and holds the licenses for Ivanka Trump, Calvin Klein and Tommy Hilfiger, among others.

It said that the transaction had an enterprise value of $650 million.

The last fashion brand that LVMH sold was Christian Lacroix in 2005.

In a statement, Antonio Belloni, LVMH group Managing Director, said that G-III "has the expertise and capabilities to broaden the brand's distribution and take it to its next level of success." Belloni said that the French company had not been looking to sell Donna Karan until it was contacted by G-III.

The sale will most likely be regarded as a rare admission of failure on the part of LVMH, which is known for supporting its brands, from Celine to Givenchy, until they find that alchemy of designer and chief executive that transforms a fashion line into a runaway success.

Plans for the sale come just over a year after Donna Karan herself retired from the house that bears her name and LVMH announced a new strategy for the company. It suspended the high-end line, Donna Karan, to focus on the brand's lower-priced contemporary collection, DKNY, which has been designed by Maxwell Osborne and Dao-Yi Chow, the duo behind the hip streetwear line Public School, since April 2015.

At the time of the designers' appointment, Pierre-Yves Roussel, the chairman and chief executive of LVMH Fashion Group, said that DKNY was responsible for 80 per cent of Donna Karan International sales and with the new team, "we think it can be huge." Apparently, not under LVMH.

The change in ownership would be the latest saga in the history of the Donna Karan brand, a fashion house that has occupied a special place in the heart of the American working woman since it was introduced in 1984 with the "seven easy pieces" - all anyone would need to build a professional wardrobe.

The brand went public in 1996, and LVMH bought it in 2001 for $643 million as part of a drive into the United States market. But the French company struggled with it over the years, and good will among American consumers did not translate into big sales.

The relationship between LVMH and the brand's founder showed strains. Karan, before her retirement, said in a New York Times profile, "Vuitton has given me the cold shoulder.

In an April results announcement, LVMH said that Donna Karan and Marc Jacobs - the latter now LVMH's sole United States fashion property - continued "to work on the evolution of their product lines."

No longer involved in the company that bears her name, Karan is concentrating on her Urban Zen line of products that focus on wellness and promote the work of artisans around the world.

Osborne and Chow, as well as Caroline Brown, chief executive of Donna Karan International, will remain with the brand through the transition, according to an LVMH spokeswoman.

Barclays was G-III's financial adviser on the transaction, and Norton Rose Fulbright US and Simpson Thacher and Bartlett were its legal advisers. Barack Ferrazzano Kirschbaum and Nagelberg was the legal adviser to LVMH.

©2016 The New York Times News Service