Luxury giant LVMH Group wants to sell DKNY to buy Hermes?

The LVMH Group, famous for its luxury brands, is rumored to be putting its Donna Karan DKNY line up for sale. As the conglomerate shifts its focus towards further expansion and optimizing its holdings, DKNY looks like one of the brands being sacrificed in this process. To achieve greater financial flexibility, it seems DKNY could be the next brand to go.

DKNY

Established in 1996 with the success of Donna Karan International going public in the U.S., DKNY quickly caught the attention of LVMH. By 2001, LVMH had acquired Donna Karan International. However, as LVMH continues to push for higher-end luxury products, DKNY’s more casual street-style appeal has become less aligned with the group’s ambitions to dominate the global luxury market. On Donna Karan's personal website, she humorously described DKNY as "the pizza to Collection’s caviar," suggesting that while DKNY holds a special place in New York, it struggles to compete globally with luxury brands.

DKNY

What is DKNY worth?

According to investment experts, LVMH might fetch hundreds of millions of dollars from this sale. While there are speculations about potential buyers, including other companies or even Donna Karan herself, the question remains whether she could afford the price tag LVMH would likely set.

Will Moët Hennessy face the same fate?

European private equity firms have hinted that LVMH’s Moët Hennessy division might also be up for grabs. The first reason cited is the 17% drop in sales within the wine and spirits segment during the first half of 2009. Additionally, the proceeds from selling DKNY and Moët Hennessy could allow CEO Bernard Arnault to pursue larger acquisitions, such as the coveted Hermes brand.