LVMH Looks to Recruit New CEO for Donna Karan By CHRISTINA PASSARIELLO July 12, 2006 11:03 p.m.; Page B5 Fashion house Donna Karan is getting a new boss, again. LVMH Moët Hennessy Louis Vuitton, which bought Donna Karan International in 2001, is in the final stages of recruiting a new chief executive to accelerate the struggling brand's growth, according to a person familiar with the situation. The new chief executive, who will be the fourth person to run the company since it was acquired by LVMH, will succeed Jeffry Aronsson, who is expected to leave by the end of the month after three years on the job. The new chief executive comes from a U.S. consumer brand, according to the person familiar with the matter who didn't reveal the new chief executive's identity. Officials at LVMH and Donna Karan declined to comment. The management reshuffle marks LVMH's latest effort to make a success of DKI's stable of labels, which include Donna Karan Collection and DKNY. DKI has always been an awkward fit at LVMH, the world's largest luxury-goods group. In the past few years, LVMH has shopped around for potential buyers of the fashion house, but the asking price was considered too high, people familiar with the matter say. LVMH, which owns more upscale fashion brands such as Louis Vuitton and Fendi, bought the business from the brand's founder, Donna Karan, and the publicly traded Donna Karan International Inc. for nearly $700 million, in one of the last purchases made by the Paris luxury-goods group before it shifted its focus to internal restructuring. Seeking to make the brand more desirable, Mr. Aronsson slashed distribution in outlet stores. While this has limited Donna Karan to more-desirable sales points, revenue has yet to recover. Mr. Aronsson also cut short a license deal with Liz Claiborne Inc. for its City DKNY sportswear line. LVMH says DKI is profitable at the operating level, but the group doesn't disclose sales or net profit by brand. Ms. Karan is still designing for the label, and her recent fashion shows have received more positive reviews than previous collections. Still, she hasn't made a significant break into the high-margin accessories category. Ms. Karan has approved LVMH's choice for chief executive, whom the French group had been trying to recruit for two years, according to the person familiar with the matter.