<\/p>\n
\n\tG-III Apparel Group was feeling some pressure in the fourth quarter.\u00a0<\/p>\n
\n\tThe Saks Global bankruptcy led to $17.5 million in bad debt expenses as well as another $45 million in noncash impairment charges. And the company is in the middle of exiting the licensed Calvin Klein and Tommy Hilfiger businesses with onetime bestie PVH Corp.<\/p>\n
\n\tBut Morris Goldfarb, chairman and chief executive officer, told WWD that it was \u201ca reasonably good quarter\u201d and that the company he\u2019s led for more than 50 years is ready for whatever comes next \u2014 the complete exit of the PVH brands, fallout from the war with Iran or something else.\u00a0<\/p>\n
\n\t\u201cI don\u2019t know that it could get much more difficult than we\u2019ve faced in the last four or five years,\u201d Goldfarb said. \u201cI don\u2019t know what else could be thrown at us. So we weathered the storm through COVID. G-III\u2019s weathered the storm of losing 60-some odd percent of our business [in the PVH breakup]. So not too concerned, this is a good army [at G-III]. We\u2019ve got very bright, calculated people in managing a business and they\u2019re responsive when something just comes out of the woodwork.\u201d<\/p>\n
\n\tThe company\u2019s net income for the fourth quarter totaled $31.9 million and compared with net income of $48.8 million a year earlier. Sales for the three months ended Jan. 31 decreased 8.1 percent to $771.5 million.<\/p>\n
\n\tAdjusted earnings per share came in at 30 cents, below the 59 cents analysts projected, according to Yahoo Finance.\u00a0<\/p>\n
\n\tThat capped a year when net profits totaled $67.4 million and sales fell 7 percent to $2.96 billion.<\/p>\n
\n\tThe relaunched Donna Karan delivered roughly 40 percent growth and what the company described as \u201cstrong profitability from healthy AURs and sell-throughs.\u201d The brand has 1,900 points of distribution in North America.\u00a0<\/p>\n
\n\tKarl Lagerfeld, which has 3,000 points of distribution in the region, grew in the high single digits.\u00a0<\/p>\n
\n\tThis year, G-III is projecting slower growth as the company\u2019s Saks Global business, which was always off-price-heavy, wanes and the business with PVH finally winds down.<\/p>\n
\n\tG-III expects sales will fall 8 percent to $2.71 billion this year, incorporating the loss of $470 million of sales from Calvin Klein and Tommy Hilfiger.<\/p>\n
\n\tDiluted earnings per share are slated to range from $2 to $2.10 \u2014 a good deal off the $2.93 Wall Street was forecasting.\u00a0<\/p>\n
\n\tThe company is cutting back on some of its costs as the PVH licenses are phased out, identifying $25 million in run-rate savings that will be realized across its supply chain, organizational structure and discretionary expenses.<\/p>\n
\n\tBut Goldfarb doesn\u2019t want to cut back too much as he\u2019s looking to buy more brands to power the business higher. \u00a0<\/p>\n
\n\t\u201cWe\u2019re a little top-heavy on [selling, general and administrative expenses], but SG&A can be affected immediately by laying off your people and giving up space,\u201d Goldfarb said. \u201cBut when you\u2019re G-III and you know inevitably you\u2019re going to replace the PVH assets \u2014 if it\u2019s not today, it\u2019ll be tomorrow \u2014 you want your talent pool here. If you let them go, you\u2019re likely to lose them and there\u2019s no recapture. Effectively, they\u2019re too good to lose.\u201d<\/p>\n
\n\tGoldfarb said the company could have identified $100 million in cost savings instead of just $25 million, but maintained, \u201cWe\u2019re not in crisis. We have sufficient cash to execute our needs and even more than our needs, our dreams. We\u2019re sitting with over $400 million in cash and another $700 million of availability untapped.\u201d<\/p>\n
\n\tWhat the plan for all that money?<\/p>\n
\n\tThe CEO said he\u2019s looking at brands in the sports sector, having just signed licenses with Champion as well as Converse. G-III also recently signed a license with French Connection and Goldfarb said he\u2019s looking at other contemporary brands.\u00a0<\/p>\n
\n\t\u201cEvery day there\u2019s some sort of an opportunity and we have not found the perfect fit yet, but I assure you we will,\u201d he said. \u201cWe\u2019ve got people, we integrate companies well. We\u2019ve shown that. We\u2019re not new on the acquisition side, so the right deal will come our way.\u201d<\/p>\n
#GIII #Earnings #Hit #Saks #Global #Bankruptcy<\/p>\n","protected":false},"excerpt":{"rendered":"
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