Diane von Fürstenberg Lays Off 75% of Staff, Closes All But One Retail Store amid Coronavirus: Report

The brand will move to a "digital-only, China-focused" business model, according to Business of Fashion

Diane Von Furstenberg
Photo: Nicholas Hunt/Getty

Diane von Fürstenberg's namesake fashion brand is facing major setbacks amid the novel coronavirus (COVID-19).

The beloved New York-based label has laid off 75 percent of its 400-person staff and is set to close 18 of its 19 retail stores. Its new focus will be centered on a "digital-only, China-focused" business model, according Business of Fashion's latest report published on Monday morning.

The news comes after several rounds of restructuring within the company and years of sales declines — in part due to the death of once-cutting edge department stores and exacerbated by the economic impact of the global pandemic. The DVF store in New York City's Meatpacking District (which also holds the company's office and a living space for von Fürstenberg) is the only location that will remain open. International branches in England and France will also close, according to BoF.

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DVF’s initial company-wide layoff came in May and were conducted over Zoom "without any comment from von Fürstenberg," leaving a “skeleton crew” of just 25 percent of staff still employed. More executive team members were let go in June, multiple sources close to the company told BoF. The outlet reports that both Chief Executive Sandra Campos and Vice President of Production Holliday Hofstatter have left the company.

Representatives from DVF did not immediately respond to PEOPLE's request for comment.

The designer gained national success when she launched the brand in 1972, thanks to her invention of the sought-after wrap dress design. The brand went on to flourish and von Fürstenberg, 73, quickly became a household name.

In 1983 she sold her dress design license to Puritan Fashions Corporation, which ended her control over her namesake line, until she reacquired the license in 1997, spurring another wave of brand success.

Von Fürstenberg currently sits on DVF’s board, but took a step back in the day-to-day running of the business in 2016 when the brand hired Jonathan Saunders as its first chief creative officer. He resigned in 2017. BoF reports that the company is considering rehiring designer Nathan Jenden who last worked for DVF in 2018.

DVF is the latest in a long list of fashion companies, including Neiman Marcus, Bergdorf Goodman and J.Crew, facing financial struggles during the on-going pandemic.

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Many fashion retailers, which were already struggling before the crisis, have been especially hard-hit as customers remain focused on buying essential items. And with social distancing measures still in place in certain areas of the country, many stores will continue to suffer and face uncertain futures.

"Then there is the trend of more shopping going online and retailers having way too many physical stores. Now with COVID-19 in the mix, it is really going to accelerate the trends with more store closures and ultimate failures," David Berliner, partner at accounting firm BDO, told Forbes last month. "Bottom line, I expect there will be fewer retail chains surviving post-COVID-19 and the surviving chains, particularly apparel and other mall-based specialty stores, will reduce the number of brick & mortar store locations."

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