G-lll Apparel Group shows signs of recovery – WWD

The return of G-lll Apparel Group Ltd. begins to gain ground.

The maker and retailer, parent company of the DKNY and Donna Karan brands, revealed its quarterly results Tuesday ahead of the market opening, falling short of results but still managing to post a profit of $ 63 million. The company’s shares rose more than 7 percent during Tuesday’s session, to close down 0.08 percent at $ 23.96 apiece.

“Our results reflect a significant sequential improvement in the third quarter as we effectively developed product lines aligned with changing consumer demand towards casual, comfortable and functional apparel,” said Morris Goldfarb, Chief Executive Officer of G-III, in a press release. declaration. “We believe our product mixes for our global brand portfolio are responsive to today’s market trends as we continue to gain market share. “

Ath-leisure, including DKNY looks, was one of the strongest categories in all of G-lll Apparel last quarter.
Courtesy photo

The company – which also includes Vilebrequin, Eliza J, Jessica Howard, Andrew Marc and Marc New York in the larger portfolio, in addition to fashion licenses under Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess , The brands Vince Camuto, Levi’s and Dockers reported total revenues of $ 826 million for the three-month period ending October 31. This is a reduction of 26.7% from the $ 1.12 billion in revenue in the same period last year. Still, quarterly profits topped $ 63 million, down from $ 95 million a year ago – and a loss of $ 15 million in the second quarter.

At least part of the revenue loss was due to recent or planned store closings. In September, the company announced that it was permanently closing all 110 Wilsons Leather and 89 GH Bass stores by the end of fiscal 2021. Net sales in the retail operations segment for both brands during As of the last quarter amounted to $ 38 million, up from nearly $ 60 million a year ago as a result.

Other headwinds included the company’s clothing business and DKNY’s international business, which were down about 15% for the quarter.

DKNY G-lll Clothing

DKNY is owned by G-lll Apparel.
Courtesy photo

Meanwhile, third quarter sales were driven by strength in leisure sports, outerwear, casual shoes and jeans. The company also plans to launch its Karl Lagerfeld Paris line in around 75 Macy’s stores this spring.

“Retailers are figuring out how to handle this pandemic and consumers are buying according to their adjusted lifestyle needs,” Goldfarb said on Tuesday morning’s conference call with analysts. “This is our first year in the jeans business, which also reflects a laid back lifestyle, and look, we’ve entered this industry aggressively with CK jeans, followed again by Tommy Hilfiger and DKNY. We’re starting to make our mark in the jeans business very, very quickly.

Goldfarb predicted that each of the company’s three big jeans brands could reach $ 250 million in business, while also providing the company with the opportunity to engage with younger consumers. He added that ath-leisure, a major growth engine for the company, “permeates everything we do.”

“Our entire product line reflects what the consumer is looking for today,” Goldfarb said.

The company’s digital business is growing rapidly, with digital penetration into department stores and G-lll’s own e-commerce businesses in the quarter, year over year. In China, digital activity has doubled in the past three months.

“We continue to focus and invest our resources to follow the consumer to where they shop,” Goldfarb said on the call. “To capture more of these digital sales, we are accelerating our global investments and our top talent, systems, rapid response distribution networks, as well as new and creative marketing. “

G-lll Apparel ended the quarter with over $ 149 million in cash and cash equivalents and $ 508 million in long-term debt. The company expects net sales to decline by about 30 percent in the current quarter, compared to last year’s results. Goldfarb added during the call that the company is also on track to save around $ 28 million per year through downsizing of more than 500 employees globally.

“Now is the right time to develop real estate because real estate offers are plentiful and they are much fairer than they have been historically,” Goldfarb added. “[Right now] it can be a year [lease], a percentage lease with kick outs; we are therefore not coupled with 10-year leases that we would have to buy to get out. We have learned our lesson. We paid dearly for real estate and mistakes just recently as we closed GH Bass and Wilsons Leather [stores]. So we continue to retail in a very, very cautious and opportunistic manner. It would have to be a lot for us to jump and catch it. ”

Shares of G-III Apparel were down nearly 17% year-on-year.

“We are very fortunate and appreciate to have an experienced and talented global team at G-III who have proactively addressed the extraordinary challenges presented by the pandemic,” Goldfarb said in his prepared remarks. “We ended the quarter with a strong financial position, with approximately $ 800 million in [working capital] and availability under our revolving credit facility. We are well positioned to end the year according to our expectations.


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