The Future Of Fashion Label Diane von Furstenberg Is Uncertain

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Diane von Furstenberg Resort 2020

NEW YORK, UNITED STATESAmerican fashion label Diane von Furstenberg is uncertain of its future after multiple rounds of restructuring and years of declining sales.

The label which is best known for its iconic wrap dress has laid off most of its team and is shifting its business to a digital-only, China-focused model, according to BoF.

It’s a major setback for a designer. Like so many contemporary brands, DVF has found itself squeezed by fast fashion and the decline of department stores. The coronavirus pandemic, which closed stores and is expected to drive down consumer spending on fashion, was the final blow.

Multiple sources close to the company told BoF that much of the executive team was let go from DVF in early June. Chief Executive Sandra Campos resigned, and Vice President of Production Holliday Hofstatter is no longer at DVF either. This comes on the heels of layoffs in May, where 75 percent of the company’s roughly 400 employees were let go, leaving the team down to a “skeleton crew.” Employees said layoffs were done over Zoom and without any comment from von Furstenberg. Some employees were let go without severance.

The international businesses of DVF in England and France will shutter. (At the end of May, the brand’s British subsidiary, DVF Studio UK, went into administration, the country’s equivalent to Chapter 11.)

DVF will close 18 retail locations, leaving only its store in New York City’s meatpacking district, which von Furstenberg owns. (The additional floors are the company’s office, studio and a live-work space for the designer.)

The DVF brand began in 1972, when von Furstenberg, then married to her first husband, the German aristocrat Prince Egon von Furstenberg, introduced the wrap dress. Von Furstenberg was in her 20s and had immigrated to the US when she launched her brand.

The 73-year-old designer, in many ways, is synonymous with American fashion. Von Furstenberg was the chairman of the Council of Fashion Designers of America for 13 years and has mentored designers including Alexander Wang. The brand is privately owned and family-run; von Furstenberg sits on the brand’s board, as do her husband, Barry Diller, and her children Alex von Furstenberg and Tatiana von Furstenberg.

But like many fashion brands, DVF was struggling well before Covid-19. Sources said the company generated promising results from its direct-to-consumer e-commerce arm, but that didn’t make up for the high cost of running physical stores — it reduced its number of locations from 32 to 19 over the last two years, some of which were international or franchises. It also had declining sales at department stores.

Campos, the chief executive who was laid off last week, was brought on in 2018 from Global Brands Group, where she was co-president of women’s apparel, which included brands like Juicy Couture and Herve Leger. She was tasked with revamping the company; she streamlined the business’ multiple offices, introduced more affordable products and focused on its direct-to-consumer channel.

With the focus on direct sales, DVF shrunk its wholesale footprint. But it has also lost crucial accounts. It was dropped by Bloomingdale’s, and was stocked at fewer stores with Neiman Marcus, Saks Fifth Avenue and Nordstrom. One employee who worked in merchandising said the brand was down to about 10 wholesale accounts in the US, and that many wholesalers did not want to work with the company because the product didn’t sell well.

Clothing from the DVF label starts at around $200, but can go all the way up to $1,800, putting the brand in the category of mid-priced fashion labels that have been edged out in recent years by cheaper alternatives from fast fashion and the growing resale market. DVF’s designs were never quite distinct enough to hold customers’ attention in an increasingly crowded market. Sources said revenue is expected to come in well below $250 million this year, down from a reported $500 million in 2015. DVF had been looking for a buyer and was also considering licensing its brand name.

DVF is still developing its business plan, but sources say the company has hired designer Nathan Jenden for the third time (see it here). Jenden worked for the company for a decade and was instrumental in DVF’s growth. After leaving in 2011, DVF cycled through a few artistic directors until it hired Scottish designer Jonathan Saunders in 2016 as its first chief creative officer (see it here). Saunders quit in 2017 (see it here), with friction coming from creative differences. Jenden was temporarily hired back to DVF from the Global Brands Group-owned Bebe (where he met Campos) but departed again in 2018.

The company’s international wholesale business was performing better than its US one, and so the company plans to keep selling DVF to a few wholesalers in Europe, under a small team in London.

Sources say the company will now mainly focus on wholesaling to stores in China — an effort that will be run by Gabby Hirata, the company’s head of business development for Asia-Pacific. It’s unclear if the company will still be running its e-commerce operations in the US once it sells out of the Spring collection currently on the site.

As a designer and businesswoman, von Furstenberg has reinvented herself many times. Her different business models reflect the fashion industry’s trajectory; the fact that she is focusing on China, which was responsible for 38 percent of the global fashion industry’s growth over the last decade, indicates that the company might well weather this difficult time.

Diane von Furstenberg Resort 2020

Photos Credit: Courtesy of Diane von Furstenberg

Source: BoF

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Donovan is the CEO and Editor-In-Chief of For all general inquiries please email Donovan has a BA in Journalism & Media Studies from the prestigious Rutgers University. He's currently studying entertainment and fashion law.