Donna Karan to close its Manhattan store as DKNY continues to expand

US designer Donna Karan is set to close the doors of her Collections New York flagship store on August 31, the same day when the lease expires for the three leveled retail unit. Located at 819 Madison Avenue, the 11,000 square foot flagship store offers Donna Karan's women's wear collection, accessories

range as well as home line and features a private garden complete with a bamboo forest.

After careful consideration, the company has decided not to renew our Donna Karan Collection store lease at 819 Madison Avenue, which expires Aug. 31,” explained a spokeswoman from the label to WWD. “At this time, we are exploring other opportunities for a space more reflective of the spirit of our brand today.”

Donna Karan to close boutique in New York

According to a report from the Real Estate Board of New York, the average rent for a retail unit between East 57th and 72nd street was nearly 1,400 dollars during the fall of 2013, an increase of 42 percent from the same period in 2012. A sharp increase in rent could be a contributing factor to the store's closure, although no further details surrounding the reasoning behind the store's impending closure, or a potential relocation site have been revealed.

After the flagship store closes its door, Donna Karan will remain present in the city through her concession stands, DKNY stores, as well as her Urban Zen fashion and wellness center in West Village, a store concept which Donna Karan owns separate from Donna Karan International.

Some industry insiders have hinted that the store closure could be due to a slowdown in demand for the Donna Karan New York Collection label, which has lost some of its luster since being acquired by French conglomerate LVMH in 2001. In a recent interview with the NY Times, the designer revealed that she is not as “deeply immersed” in the daily running of the labels and depended on veteran design teams at Donna Karan and DKNY.

Since LVMH stepped into the picture, the brand appears to be less of a influence in the international fashion scene. Although premium department stores such as Saks Fifth Avenue and Bergdorf Goodman still sell its main label, Bloomingdale's, which was once closely knitted with Donna Karan's core customer, stopping offering its Donna Karan label eight months ago. The luxury department store continues to offer a large selection of DKNY.

DKNY gains global momentum

“Bloomingdale's does an excellent job with a big presence for DKNY,” she said at the time, adding that the label's main customer is “more a woman on the go and on the street.” In comparison to the Donna Karan label, its younger, mid-market fashion label sister DKNY appears to be doing quite well and is currently expanding overseas into core and existing markets.

Donna Karan's sister label is slated to open a 2,265 square foot standalone store in Trinity Leeds shopping center this October, its first store in the city. DKNY currently operates over 250 stores around the world, with more global openings planned for this year.

DKNY recently unveiled its inaugural Ramadan collection and first ever regionalised campaign starring two popular Middle Eastern fashion bloggers, not long after the launch of its Middle East website. The label also announced its upcoming collaboration with British model Cara Delevinge, who is set to launch a 15 piece capsule collection for the label this fall. It also tapped artist Rita Ora as the face of its FW 2014 ad campaign, which has helped increase the brand's presence and appeal among today's millennials.