Earlier this week, Stefano Gabbana and Domenico Dolce, founders and creative designers of the namesake brand, were found guilty by Italian courts for tax evasion. In 2004, the D&G line was sold to a Luxembourg holding company, a move that the prosecution argued was done solely to avoid paying Italian taxes. The court ruling, which is expected to be appealed, sentenced the two to prison for 20 months. Alfonso Dolce, Cristiana Ruella and Giuseppe Minoni were each sentenced to 16 months.
Meanwhile, LVMH and Hermes are continuing to play out their courtroom saga, with the later filing another lawsuit against the luxury conglomerate. Hermes’ claim aims to annul the equity swaps that allowed LVMH to acquire its initial 12 percent stake in Hermes using a series of complex financial instruments in accumulations below mandatory disclosure thresholds for public companies, according to WWD.
To add, LVMH filed a suit against Hermes accusing of allegedly swaying an investigation by Autorite des Marches Financiers, which recommended LVMH be fined $13.3 million.
LVMH currently has a 22.6 percent stake in Hermes, which is the second-highest share by a non-family member. Though LVMH repeatedly claims its increased stakes are friendly, Hermes is very public about the opposite opinion.
Meanwhile, General Motors says that it aims to increase its share of China’s luxury auto market to 10 percent by 2020. The company has been trying to reposition Cadillac as a luxury brand for some time, and is toning down the look of the cars to woo Chinese buyers. According to the chief GM exec Dan Akerson, Chinese luxury auto buyers will account for up to 40 percent of the world’s total luxury auto market by 2020. Cadillac mainly competes with BMW, Mercedes and Audi for Chinese attention.
Finally, Alexander McQueen is expanding awareness and possibly aiming for a younger consumer base with a new deal with Proctor & Gamble Co. for a fragrance. The Prestige division of the company signed on to create a men’s and women’s fragrance business. Alexander McQueen previously developed fragrances in 2003 and 2005, but when L’Oreal acquired YSL Beaute in 2008, the Kingdom and My Queen scents did not make the cut, and were discontinued.
P&G Prestige develops fragrances for Hugo Boss, Dolce & Gabbana