LVMH Moet Hennessy Louis Vuitton SE(ADR) Sells Luxury Brand Donna Karan for $650M

LVMH Moet Hennessy Louis Vuitton SE(ADR) (OTCMKTS:LVMUY) announced the sale of its luxury brand Donna Karan for $650 million.

Donna Karan, DKNY, G-IIIThe luxury goods company is selling Donna Karan International, which includes the Donna Karan and DKNY brands, to New York City-based apparel company G-III Apparel Group, Ltd. (NASDAQ:GIII). The deal is being funded by new debt, a $75 million six-and-a-half-year seller note and $75 million of newly-issued GIII stock to LVMH.

G-III said it doesn’t plan to update its financial guidance until after it has acquired the two brands from LVMH. However, it did note that it expects the transaction to be dilutive in the fiscal year ending January 31, 2018. After this it expects the brands to be accretive to its earnings.

“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,” Morris Goldfarb, Chairmain, CEO and President of G-III, said in a statement. “We believe we are well positioned to create and sustain additional value for our shareholders, partners, and customers.”

LVMH said it expects the sale of the two brands to G-III to be completed in late 2016 or early 2017.

G-III also announced that it held a conference call today to discuss the acquisition of the Donna Karan and DKNY brands from LVMH. The call will remain available for replay on its website from July 25, 2016 through Aug. 1, 2016.

The Donna Karan brand was launched in 1984 by Donna Karan. It became a publicly traded company in 1996 and was bought by LVMH in 2001.

GIII shares were down 5% as of Noon Monday.

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