G-III Apparel to Purchase Karl Lagerfeld Brand
G-III Apparel Group, Ltd. has agreed to acquire the remaining 81 percent stake in Karl Lagerfeld for $210 million in cash, making G-III the sole owner of the company.
“This transaction marks yet another significant milestone for G-III. Since acquiring a stake in the brand in 2015, G-III has built Karl Lagerfeld into an important and rapidly growing part of our North American business,” said Morris Goldfarb, G-III’s chairman and chief executive officer. “Fully owning this visionary brand is a continuation of our successful partnership with the Karl Lagerfeld management team. Importantly, the addition of this iconic fashion brand to the G-III portfolio advances several of our key priorities—namely an increase in the direct ownership of brands and their licensing opportunities and further diversification of our global presence.”
Karl Lagerfeld will be added to G-III's portfolio of over 30 licensed and proprietary brands that includes DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. Karl Lagerfeld has approximately 120 company and partner-operated stores with key locations in Paris, London, Berlin, Dubai and Shanghai in addition to wholesale distribution in the United States, Europe, the Middle East and Asia. The company’s near-term expansion strategy focuses on growth through digital retail wholesale, new product categories and increased licensing opportunities using the Karl Lagerfeld name.
The acquisition adds roughly $200 million in initial annual sales and, combined with G-III's revenues, is expected to generate an initial annual revenue base of $375 million. Goldfarb said he sees potential for the brand to reach retail sales over $2 billion. The sale is expected to close in the second or third quarter of fiscal year 2023.
“Over the course of more than a decade—including many years working hand-in-hand with Karl—we have developed a multifaceted fashion house and a strong business that we believe is poised for continued and significant growth. Karl’s original vision for the brand was to inspire people around the world to join his universe through creativity, and I am confident that he would be proud of how his vision and passion have come to life,” said Pier Paolo Righi, chief executive officer of Karl Lagerfeld.—Tyler Shultz