G-III Apparel Group, Ltd. announced that it has agreed to purchase the remaining 81 percent interest in fashion brand Karl Lagerfeld for €200 million (USD $210 million).
G-III will purchase the additional stake in the brand from a group of private and public investors led by Fred Gehring of Amlon Capital BV. G-III currently owns 19 percent of the brand and, through this transaction, will become the sole owner of the Karl Lagerfeld brand. The all-cash transaction has been approved by the board of directors of both companies.
Morris Goldfarb, G-III Chairman and CEO, said, “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. 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 was an icon of the fashion industry. His namesake brand embodies his spirit as a designer while also appealing to a broad range of consumers throughout the world. We have great respect for Karl Lagerfeld’s experienced and talented leadership team, led by Pier Paolo Righi, with whom we have worked closely for the last seven years. This team, combined with G-III’s expertise, is expected to unlock more of the brand’s global potential, which we believe represents a retail sales opportunity in excess of $2 billion. We are excited to welcome everyone at Karl Lagerfeld into the G-III team,” concluded Goldfarb.
Pier Paolo Righi, CEO of Karl Lagerfeld, said, “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.”
“As proud custodians of Karl’s legacy, we are guided by his mantra to ‘embrace the present and invent the future,’ and I am looking forward to building the future of his namesake brand with the combined strength of our team and G-III’s expertise in the industry,” continued Righi. “Morris and the G-III team have been part of our family since we joined forces in 2015 to bring the Lagerfeld name to North America. Since then, we have worked together to further grow the brand’s footprint. This transaction is the natural evolution of this positive working relationship. Working even more closely with a team we know, trust and have a proven track record with will allow us to further accelerate the brand’s global opportunity.”
The transaction is expected to close in the second or third quarter of fiscal year 2023, subject to certain adjustments and customary closing conditions, including receiving required regulatory approvals.
G-III received legal advice from Simpson Thacher & Bartlett LLP and De Brauw Blackstone Westbroek N.V and financial advice from Barclays Capital, Inc.
Photo courtesy Karl Lagerfeld
