As Domenico Dolce and Stefano Gabbana ready their latest collections for this spring’s slew of international catwalk shows, their lawyers will be working behind the scenes to ensure two of Italy’s most successful designers won’t be spending the next few Fashion Weeks behind bars.
In December, the design duo went on trial for alleged tax evasion after more than four years of investigations, hearings, and finally an acquittal that was then overturned by Italy’s Supreme Court.
Move up http://i.forbesimg.com t Move downOn three separate days this January and February, a Milan judge will hear from Italian tax officials and other witnesses who’ll claim the two evaded over $500 million in taxes on well over $1 billion in royalties when they sold their Dolce & Gabbana and D&G brands to their own Luxembourg-based holding company in 2004. If convicted, they could face five years in jail and a hefty fine.
Dolce, 54, and Gabbana, 50, have denied any wrongdoing. “Our conscience is clear,” Gabbana told Women’s Wear Daily when their acquittal was overturned in 2011. “The decision is in God’s hands…We pretend it doesn’t exist. It’s not in our thoughts on a daily basis.”
“Tomorrow is another day,” said Dolce, adding: “We never did this for money…please write it down.”
They may not have had money on their minds when they went into business together 28 years ago, but ever since, the bad boys of Italian fashion have amassed a fortune that has propelled them into the billionaires’ club.
In 2011, Dolce & Gabbana’s parent company reported revenues of just under $1.5 billion. Using our own calculations and price-to-revenue ratios for similar public companies, Forbes estimates that the one-time romantic partners, who own 50% of the private company apiece according to Italian legal filings, are worth well over $1 billion each.
The designers — fixtures on the party and yacht circuits — made their fortune selling their decadent, sexy lifestyle to the masses, who snapped up the Dolce & Gabbana aesthetic not just in clothing but in perfume, purses and accessories.
The two made the decision to shutter lower-priced diffusion brand D&G (think $80 slogan t-shirts) in 2011 to focus on their bread and butter, Dolce & Gabbana. This allowed the duo to debut their first couture collection in September 2012, to a rapturous reception from the fashion press (Vogue deemed the gowns “stunning”, and they don’t mince their words).
They claim to have no interest in taking the company public — at least, not for the foreseeable future. Nor will they sell out to one of the all-powerful fashion conglomerates like LVMH. In an interview with the Financial Times last year, Dolce explained that they “don’t want the money.”
Dolce and Gabbana will likely debut on Forbes’ next World’s Billionaires List in March. They’ll join American designer Tory Burch, the most recent inductee to the 10-figure fashion club, just behind Diesel founder Renzo Rosso who made his fortune with designer denim and made it into the billionaires’ club in December.