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Exclusive: Sports Direct in running to win DKNY licence

Sportswear giant tipped to take over DKNY menswear portfolio after Indian licensee is axed.

Donna Karan International has severed its licensing deal with Indian textile manufacturer S Kumars Nationwide (SKNL) to produce the luxury brand’s menswear line, three years before the contract was due to expire.

The licensing deal, made in 2010, replaced a similar agreement that Donna Karan International, part of the LVMH group, had with brand house and supply group Marchpole Holdings, which went into administration in November 2008.

The SKNL deal had been intended to run until 2015, with an option to extend it for another seven years.

Discussions are under way about a suitable replacement. A source close to the situation told Drapers that Mike Ashley’s Sports Direct was the front-runner to take over the menswear licence.

“The DKNY womenswear collection is still a very good product, but menswear has slipped. The power [of the menswear brand] lies in the name,” said the source.

In the summer, Sports Direct acquired a 51% stake in premium indie mini-chain Flannels to add to the Premium Lifestyle division the sportswear giant created last year. The division includes retailers USC, Cruise and Van Mildert, as well as the Firetrap brand.

If Sports Direct acquires the DKNY menswear licence, it is likely the brand would sit within this growing division and could allow the sportswear giant to grow its international presence. DKNY menswear also has similar adjacencies with other brands stocked by Flannels.

The Premium Lifestyle businesses have a combined estimated annual turnover of more than £100m. In the 13 weeks to July 29, sales in the division were £28.8m with a £12.1m gross profit.

But if the deal goes through, Sports Direct could have its work cut out to reassure DKNY menswear stockists. Last week, Drapers revealed that Sports Direct plans to sell Firetrap product for less than the wholesale price both in store and online from November 1, after having told stockists it would not sell the brand’s products directly when it acquired parent company World Design & Trade in March.

Donna Karan International executive vice-president of global marketing and communications Patti Cohen confirmed the termination of the licensing agreement with SKNL but declined to comment further. She said: “We recently ended our licence with SKNL. We are considering new arrangements for DKNY menswear, which we expect to continue to be an important segment of our business. We are not prepared to comment further at this time.”

Former executive deputy chairman of Marchpole, Michael Morris, who continued to handle the DKNY menswear portfolio at SKNL, also declined to comment. Sports Direct was unavailable for comment.

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