LVMH has entered a definitive agreement to sell its Marc Jacobs brand to US brand firm WHP Global, which owns Vera Wang and Rag & Bone.

The namesake designer Marc Jacobs will remain as creative director once the transaction is finalised later this year, subject to regulatory approvals.

Once the deal is complete, another company, G-III, will purchase and co-own part of the Marc Jacobs brand alongside WHP Global.

The two companies will form a joint venture that will hold the brand, and G-III said its investment in the brand would be around $500m (£374m).

G-III will be responsible for operating Marc Jacobs’ direct-to-consumer and wholesale businesses.

The sale is the latest disposal from LVMH of its smaller, underperforming brands as it looks to slim down its portfolio amid a market-wide slowdown.

The Wall Street Journal previously reported that LVMH was in talks to sell Marc Jacobs in a transaction valued at $1bn (£748.9m) last July.

The French luxury group is understood to have been in talks with several potential buyers, including Reebok and Ted Baker owner Authentic.

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