Marchpole signs DKNY deal

Brand house Marchpole has signed a joint venture deal with Donna Karan International to produce a DKNY menswear range for spring 09.

The bridge-level range, to be called DKNY Black Label, will target high end department stores, boutiques and will be stocked in about 60 DKNY stores internationally.

The seven-year deal has resulted in the creation of a new company, which is 90%-owned by Marchpole, with Donna Karan International's initial 10% stake rising to 20% over the period of the deal. Donna Karan International is part of LVMH.

Marchpole executive deputy chairman Michael Morris said the deal would help the company deliver growth and better shareholder value over the medium to long term.

The group, which also distributes brands including Boateng, Jean-Charles de Castelbajac and Emanuel Ungaro, saw last year's £6.3 million profit turn into a pre-tax loss of £6.1 million for the 53 weeks ended April 5.

Sales halved to £44.7m for the period, which the group blamed on difficult trading conditions.

Marchpole also said it expected a 40% drop in sales from Greenmark, the footwear supply business it bought for £3 million in February 2007, after ending dealings with its main client, who Marchpole said was "unable to meet the requirements of its contract due to financial constraints".

Marchpole executive deputy chairman Michael Morris said it had been a challenging year, but added: "Our pipeline remains healthy and in line with our growth strategy.
"We've strengthened our presence in major brand-driven markets via new earnings, enhancing licensing and partnership agreements."

Since the end of the reporting period Marchpole has opened a flagship store for its Jean-Charles de Castelbajac brand in London's Conduit Street.