Stefano Gabbana has stepped down from his role as chairman of Dolce & Gabbana and is exploring possibilities regarding his ownership stake in the renowned Italian fashion house in anticipation of discussions with its financial creditors.
Gabanna, aged 63, co-founded the fashion house with his former partner Domenico Dolce, but resigned from his position in December as per an Italian corporate document.
Alfonso Dolce, the brother of Domenico and the current CEO, assumed the role of chairman in January. This resignation has not been previously disclosed.
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According to reports, the fashion magnate is exploring different possibilities regarding his approximately 40 percent stake in the company, which is embarking on fresh negotiations with lenders. The privately held company has been adversely affected by an extended downturn in the high-end market, further exacerbated by the instability resulting from the conflict in Iran. These obstacles have had a negative impact on profits and have presented challenges in adhering to the conditions regulating its financial obligations.
Lenders of Dolce & Gabbana are currently in the process of securing a capital infusion of up to €150 million as a component of a larger refinancing effort involving €450 million of outstanding debt, according to reports.
The fashion house is exploring options such as selling off real estate holdings and renegotiating licensing agreements to generate the necessary funds. It was reported in the previous month that Rothschild & Co. is providing advisory services to the company.
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The company is planning to make management changes, and as part of this restructuring, former Gucci CEO Stefano Cantino is expected to be appointed to a senior executive position.
Dolce & Gabbana was established in 1985 and swiftly rose to prominence as a globally recognized fashion label known for its Mediterranean-influenced design. Despite parting ways over two decades ago, the founders have maintained their professional collaboration, with Domenico Dolce, aged 67, possessing a 40 percent interest through a holding company.
The remaining shares are individually held by Domenico, Alfonso, and their sister Dorotea. In light of a decline in global luxury consumption, Italian fashion brands are becoming more receptive to mergers and new investments from financiers.
Following Valentino's violation of debt conditions, shareholders Kering SA and Mayhoola reached an agreement in the previous year to offer €100 million as a component of a settlement with creditors.
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Prada SpA purchased Gianni Versace Srl, and Giorgio Armani stipulated in his testament that his beneficiaries should divest an initial 15 percent interest in the business within a year and a half.
Dolce & Gabbana has strived to maintain its autonomy through diversification into the beauty, real estate, and hospitality sectors. In accordance with an agreement made with financial institutions last year, the firm restructured its debt with a maturity date of February 2030 and secured €150 million in fresh loans to support its growth trajectory.