(April 10): Stefano Gabbana resigned as chairman of Dolce & Gabbana and is considering options for his stake in the Italian fashion company ahead of negotiations with its bank lenders.
Gabbana, 63, who founded the design house with his then-partner Domenico Dolce, stepped down in December, according to an Italian corporate filing. Alfonso Dolce, Domenico’s brother and current CEO, took over as chairman in January. The resignation hasn’t been reported before.
The fashion mogul is considering alternative options for his holding of about 40% in the firm, which is entering a new round of debt talks with creditors, according to people familiar with the matter, who asked not to be named because they aren’t authorised to talk about it.
The closely held firm has been squeezed by a prolonged slump in the luxury sector, compounded by uncertainty stemming from the war in Iran. The setbacks have weighed on earnings and made it tougher to meet terms governing its debt.
Dolce & Gabbana’s lenders are now seeking an injection of up to €150 million (US$176 million or $224.4 million) in fresh funds as part of a broader refinancing of €450 million of debt, some of the people said. The company is considering the disposal of real estate assets and renewal of licenses to raise the money, they said. Bloomberg News reported last month that the company is being advised by Rothschild & Co.
As part of the management changes, the firm is also set to appoint former Gucci CEO Stefano Cantino in a top management role, separate people familiar said.
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A spokesperson for the firm declined to comment. Gabbana didn’t respond to messages and emails requesting comment. Cantino declined to comment.
Dolce & Gabbana was founded in 1985 and quickly became one of the world’s most recognisable fashion brands with its Mediterranean-inspired aesthetic. Although the couple split more than 20 years ago, they remained business partners, with Domenico Dolce, 67, also owning a 40% stake through a holding unit. The remainder is separately held by Domenico, Alfonso and their sister Dorotea.
Faced with a global slump in luxury demand, Italian fashion houses are increasingly opening up to mergers and fresh capital from investors. After Valentino breached debt terms, owners Kering SA and Mayhoola last year agreed to provide €100 million as part of a deal with banks. Prada SpA acquired Gianni Versace Srl, while Giorgio Armani directed in his will that his heirs sell an initial 15% stake in the company within 18 months.
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Dolce & Gabbana has sought to preserve its independence by expanding into beauty, real estate and hospitality. As part of a deal reached with banks last year, the company refinanced its debt to February 2030 and raised €150 million in new borrowing to fund its expansion.
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