Dolce & Gabbana secures debt waiver amid revenue decline

Dolce & Gabbana has reached an agreement with its lending banks to waive financial covenant breaches and secure liquidity following a period of increased debt and operating losses. The privately owned luxury group reported a 2% decline in fiscal year revenues, totaling €1.86 billion, for the period ending March 31. While growth in the beauty division provided some offset, the core fashion business saw weaker performance, contributing to an operating loss of just over €100 million.

The company’s net financial debt rose to €464.5 million, up from €379.6 million the previous year, which breached existing loan conditions. Under the new terms, banks have suspended covenant testing until March 31, 2028. In return, the group has committed to extraordinary financing transactions to strengthen liquidity and reduce its net debt-to-EBITDA ratio to below 3 by March 2028. This may include asset disposals, such as real estate. Additionally, the company raised €150 million by extending its eyewear license agreement with EssilorLuxottica until 2050.