Amid Tax Scandal, Italy’s Bad Boys Of Fashion Dolce And Gabbana Become Billionaires

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.
On 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, 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.
A spokesman for Dolce & Gabbana had no
comment on this story.

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