G-III Apparel Group, the American fashion conglomerate known for its ownership of popular brands like Donna Karan and Sonia Rykiel, is set to acquire full ownership of the Karl Lagerfeld label. The group already holds a 19% stake in the renowned ready-to-wear brand and will purchase the remaining 81% from a group of investors for $210 million. This all-cash transaction has been approved by both companies’ board of directors and is expected to be completed in the coming months.

Despite the acquisition, the existing management team of Karl Lagerfeld, led by CEO Pier Paolo Righi, will remain in place. G-III has expressed confidence in Righi’s leadership and believes in the global potential of the brand. CEO Morris Goldfarb stated that the combination of Righi’s team and G-III’s expertise will unlock even more of Karl Lagerfeld’s potential, estimating a retail sales opportunity exceeding $2 billion.

The collaboration between G-III and Karl Lagerfeld dates back to 2015 when they joined forces to bring the brand to North America. Since then, they have worked together to expand its footprint. Goldfarb believes that this acquisition is the natural progression of their positive working relationship.

For G-III, the acquisition of the Karl Lagerfeld label is a significant milestone. With a valuation of $2.7 billion, the company has ambitious plans for growth. They have acquired other prominent brands like Sonia Rykiel and have established licensing agreements with Calvin Klein and Tommy Hilfiger. G-III aims to double the sales of Karl Lagerfeld, which currently stand at around 1 billion euros. The addition of this iconic fashion brand to their portfolio aligns with G-III’s priorities to increase ownership of brands and licensing opportunities while diversifying their global presence.

Under CEO Righi’s leadership, Karl Lagerfeld has experienced a successful revival over the past decade. He repositioned the brand in the affordable luxury market by expanding licenses and accelerating retail expansion and digitization. With approximately 15 licenses across various categories and nearly 120 company-owned and franchised stores, Karl Lagerfeld has seen sales growth of 40% in 2021 compared to the previous year, with a growth rate of 35% compared to pre-pandemic levels. The company aims to achieve annual growth of 20-25%.

The acquisition of Karl Lagerfeld is expected to be completed in the second or third quarter of G-III’s 2022-23 fiscal year. Along with the brand, G-III will also acquire Karl Lagerfeld’s 10% stake in its joint venture in China.

Useful links:
1. G-III Apparel Group Official Website
2. Karl Lagerfeld Official Website