Dolce & Gabbana Eyeing Sale-Leaseback for Italy Properties

An Italian icon is considering selling real estate in one of the world’s foremost fashion capitals.

Dolce & Gabbana is discussing selling its real estate assets in Milan as it negotiates with lenders, Bloomberg reported. The fashion company would then lease those properties back in an effort to secure more liquidity and refinance its debt.

A decision on which buildings the company may give up has not been made, but properties in the city’s center are being considered.

Dolce & Gabbana declined to comment. So did Rothschild & Company, which is reportedly advising the fashion house in its negotiations.

In the Porta Venezia neighborhood, Dolce & Gabbana has showrooms and corporate offices. Rents for office space in the central business district reached an annual rate of €820 per square meter in the first quarter, while retail rents top all of Italy, according to Cushman & Wakefield.

Dolce & Gabbana has been negotiating with its lenders for at least a couple of months, looking to refinance about €450 million ($521 million) in debt. It recently boosted its liquidity by extending a licensing agreement with eyewear manufacturer EssilorLuxottica until 2050.

Outside of Italy, the luxury brand leased a 23,000-square-foot retail property at Tahl Propp Equities’ 695 Madison Avenue in Manhattan in October 2023. The lease came after the space’s first availability in 25 years. The annual rent for the entire building at 695 Madison was roughly $12 million a year, according to people familiar with the market.

The company also put its name on a branded condo tower at 888 Brickell Avenue in Miami, which is being developed by an affiliate of Michael Stern’s JDS Development Group. Last month, One Sotheby’s International Realty filed a lawsuit against the developer, seeking more than $500,000 in allegedly unpaid commissions, expense reimbursements, and marketing fees for its role in leading sales and marketing for the 250-unit condo-hotel tower.

Dolce & Gabbana dates back to 1985, steadily growing into one of the most recognizable fashion brands in the world. Co-founder Stefano Gabbana stepped down as chair this year, leaving Alfonso Dolce — brother of co-founder Domenico Dolce — and former Gucci head Stefano Cantino in charge.

— Holden Walter-Warner