G-III currently owns 19 per cent 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, they said in a joint statement.

The transaction is expected to close in the second or third quarter of fiscal year 2023.

The acquisition includes Karl Lagerfeld’s existing 10 per cent stake in its established joint venture in China. G-III believes that the acquisition enhances the company’s overall economic value and is expected to drive improved long-term shareholder value.

The acquisition adds approximately $200 million in initial annual sales. Combined with G-III’s revenues of $175 million in its fiscal 2022 year ended January 31, 2022, from its existing Karl Lagerfeld business in North America, this acquisition will result in a business expected to generate an initial annual revenue base of approximately $375 million. G-III believes that the combined revenues of G-III’s Karl Lagerfeld business and the acquired Karl Lagerfeld business represent an annual net revenue potential of approximately $1 billion or more than $2 billion in sales to end consumers, and that this acquisition will expand G-III’s global presence.

Morris Goldfarb, G-III’s chairman and chief executive officer, 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.

Pier Paolo Righi, chief executive officer 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 has come to life.

Fibre2Fashion News Desk (KD)