French luxury group LVMH has sold Donna Karan International, the parent of New York label DKNY, to U.S. clothing firm G-III Apparel Group in a deal valuing the loss-making fashion brand at $650 million, reports Reuters.
Analysts estimate DKNY’s annual sales at $450 million to $500 million, meaning G-III would be paying 1-1.5 times annual revenue, less than the 1.9 times LVMH paid when it bought the brand in 2001.
Over time, the Donna Karan brand lost touch with its customers as its brightly patterned African-inspired designs confused an identity based on jersey dresses, bodysuits and wrap skirts, fashion editors said.
And sister label DKNY struggled to compete with so-called accessible luxury brands Michael Kors and Tory Burch and edgier New York newcomers such as Alexander Wang.
The luxury conglomerate LVMH also faces pressure to turn around Marc Jacobs, which has seen its sales dive in the past two years. Analysts estimate Marc Jacobs makes even bigger losses than DKNY.
