LVMH Sells Donna Karan International for $650 Million

The buyer is New York-based G-III.
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DKNY designers Dao-Yi Chow and Maxwell Osborne. Photo: Dimitrios Kambouris/Getty Images

DKNY designers Dao-Yi Chow and Maxwell Osborne. Photo: Dimitrios Kambouris/Getty Images

Last week's rumors as reported by Page Six were true: On Monday, New York-based apparel group G-III announced the acquisition of Donna Karan International from LVMH for $650 million. The deal is expected to close in late 2016 or early 2017. The news comes only a year after Donna Karan, the woman, stepped down from the business she took public in 1996 and sold to LVMH in 2001 for $643 million. Donna Karan International is comprised of DKNY, led by Public School designers Dao-Yi Chow and Maxwell Osborne, and Donna Karan, which LVMH put on hold after Karan's departure. 

"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," said Toni Belloni, group managing director of LVMH, in a statement. "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."

To fund the purchase, G-III is selling $75 million of stock to LVMH — with a seller note, or deferred payment plan, of 6.5 years — and has secured financing from Barclays and JPMorgan Chase Bank. G-III said it expects the business to add value to the company after January 2018.

It's very rare for LVMH to offload fashion brands, having only sold Christian Lacroix in 2005. It has also offloaded Ebel watches and a minority stake in Hermes in recent years. 

G-III Apparel Group, Ltd was founded in 1956 as an outerwear manufacturer, and today its business is a mixture of owned brands, private labels and license agreements. In addition to owning brands such as Vilebrequin and Andrew Marc, G-III is the second-largest licensee for Calvin Klein and also holds licenses for Tommy Hilfiger, Karl Lagerfeld, Jessica Simpson, Vince Camuto, Ivanka Trump, Levi's and many more. 

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