London/Paris — Within a couple of weeks of the Covid-19 shutdown in New York City, Diane von Furstenberg realised that the pandemic risked being an extinction-level event for her eponymous brand.

Nearly all of its stores were shut and retailers were cancelling orders for the colourful wrap dresses that have made the American designer a household name. The company was left with inventory it had already paid for that it couldn’t sell and a cash-flow crisis so severe it began talks with potential investors about a partial or outright sale...

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