Will The New Club Turn Donna Karan Salted Fish?

"It seems that the India bride in the old story does not know what her future husband is like."

In 2005, Christian Lacroix was sold by LVMH to the second largest duty-free dealer Falic group in the United States.

More than 10 years later, another "India bride" came to grief -- Donna Karan International.

France

The latest announcement by the giant LVMH announced that it had agreed to its senior level.

Donna Karan and its subsidiary line brand DKNY are sold to us apparel manufacturer G-III Apparel at a price of US $650 million (about 4 billion 341 million yuan).

Just like the once brilliant Christian Lacroix, Donna Karan was almost stopped before being pferred. The sudden departure of the brand founder last summer is a fatal wound.

Fashion editor Vanessa Friedman believes that the relationship between Donna Karan and LVMH group has not been very harmonious.

In 2014, she was closed at the flagship store in Madison Avenue, New York; the LVHM group appointed a new designer to her sub line brand, and her closest employee left the company.

Of course, in LVMH, these measures are aimed at improving the sales performance of Donna Karan.

Since its launch in 1984, the annual revenue of Donna Karan has reached 700 million -8 billion (about 4 billion 673 million -53.40 billion yuan), but now it has shrunk by more than half.

"This paction is not due to the failure of the brand to restart," said Pierre-Yves Roussel, chairman and chief executive of LVMH fashion department, in accepting the BoF fashion business review. "We didn't take the initiative to find the next house at the time, but G-III came with a very high purchase price."

However, he also realized that DKNY as a sub line brand, its operation mode is not very suitable for LVMH, "but maybe G-III can succeed because this is exactly in line with their core operation mode".

Although the deal will continue into early 2017, G-III is confident that it will double its plans in three years.

Most people probably haven't heard of G-III at all.

Indeed, this family business founded in 1956 was mainly responsible for the production and sale of fashion brands such as Calvin Klein, Karl Lagerfeld and Vilebrequin.

Its retail end customers include Macy 's, The TJX Cos, Nordstrom, Saks Fifth Avenue, J.C. Penney.

The company CEO Morris Goldfarb said at a recent conference call that it had taken two years to consider whether to buy Donna Karan International.

"We plan to restart the Donna Karan main line as soon as possible, and to double our revenue in the next three years by expanding the brand and selling agency rights."

Morris Goldfarb said.

According to the plan, the main line Donna Karan will be on Neiman Marcus, Saks Fifth Avenue and Nordstrom, while the secondary line DKNY will remain in Macy "s", "DKNY" and "Qi".

"Donna Karan is not a $one billion business, I believe DKNY will be."

Morris Goldfarb said.

Up to now, the revenue of DKNY 1/3 comes from direct stores, and the remolding plan of wholesale channels with LVMH has been shrinking.

This will be the direction that Goldfarb will try to make up for in the future.

G-III expects to hand over a detailed strategy book to shareholders in the coming months.

"We will work with Caroline Brown (brand incumbent CEO) and its team to identify future directions and timetables."

Goldfarb did not mention the two creative directors of DKNY, namely Dao-Yi Chow and Maxwell Osborne.