LVMH to sell fashion brand Donna Karan to G-III Apparel for $650 mn

French luxury group Louis Vuitton Moët Hennessy (LVMH) today struck a deal to sell fashion brand Donna Karan International (DKNY) to US manufacturing and licensing company G-III Apparel Group for $650 million.

G-III Apparel will acquire Donna Karan International, Inc., parent of the Donna Karan and DKNY brands and the transaction is expected to close in late 2016 or early 2017.

G-III Apparel, based in New York, plans to fund the acquisition through new debt, $75 million of newly issued G-III common stock to LVMH, and a $75 million 6.5-year seller note.

G-III Apparel said that it has obtained financing commitments from Barclays and JPMorgan Chase Bank, N.A. for a $525 million ABL credit facility and a $450 million 6-year term loan.

DKNY is a New York-based fashion house founded in 1984 by Donna Karan and specialises in fashion goods for men and women.

The company went public in 1996, and was acquired by LVMH in 2001.

It has seventy Donna Karan collection and DKNY stores globally, including twenty in China, two in Canada, four in Dubai and some in Denmark.

Morris Goldfarb, chairman, CEO and president of G-III, said, ''Donna Karan International is an iconic global fashion company . ……  Donna Karan brings increased scale and diversification, while providing incremental growth on top of our portfolio of some of the best fashion brands in the world.''

Toni Belloni, group managing director of LVMH, said, ''Donna Karan International has a deep heritage, global recognition, and renewed energy. 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.''