G-III Apparel Group made its name in leather. The company is best known for making leather jackets under the G-III, Black Rivet, , Winlit, Marvin Richards, Andrew Marc, and Marc New York, but it also makes fashionable pants, skirts, and sportswear though brands such as Donna Karan, DKNY, Vilebrequin, Jessica Howard, and Eliza J. G-III has licensing agreements with brands such as Calvin Kline, Tommy Hilfiger, and Karl Lagerfeld. The company's customers include department stores such as Macy's, Nordstrom, Lord & Taylor, and Kohl's, and it also runs retail store networks.
The company operates in two segments: wholesale operations and retail operations.
Wholesale operations include sales of products licensed by the company from third parties, as well as sales of products under G-III's proprietary and private label brands. The wholesale segment accounts for around 80% of sales.
G-III's retail segment, which accounts for the remaining revenue, sells of outerwear, apparel, footwear and accessories in the United States, through the brands Wilsons Leather, G.H. Bass, and Calvin Klein Performance. G-III runs 199 Wilsons Leather stores, 163 G.H. Bass stores, and 5 Calvin Klein Performance stores.
The company makes genuine leather goods, and as such its products are largely high-end. This includes its non-leather lines, such as Vilebrequin, a luxury swimwear brand.
Headquartered in New York, the company has distribution centers in Dayton and Jamesberg, New Jersey. It also has an office, warehouse and distribution facility in Brooklyn Park, Minnesota.
The company's 367 stores are found in 43 states plus Puerto Rico.
Sales and Marketing
The company’s wholesale products are sold to approximately 2,800 customers, including retailers such as Macy’s, TJX, Ross Stores, Lord & Taylor, Dillard’s, the Bon-Ton Stores, Nordstrom, Saks Fifth Avenue and JC Penney, as well as membership clubs such as Costco and Sam’s Club.
Sales to Macy’s (which includes Macy’s and Bloomingdale’s chains), accounted for 20.8% of net sales in fiscal 2016, up 2 percentage points on fiscal 2015.
G-III's advertising expense for fiscals 2016 and 2015 was $81.9 million and $71.5 million.
Revenue at G-III has been increasing gradually over the past five years, and in fiscal 2016 it increased a further 11% to $2.3 billion. The Wholesale segment was boosted by strong performances in Calvin Klein licensed products (up $109.2 million), Ivanka Trump licensed products (up $29.4 million), and Eliza J. dresses (up $24.4 million), among others. The retail segment increased 3% due to higher comparable sales in G. H. Bass, offset to an extent by a 7.6% decline in same store sales in Wilsons.
Net income has likewise been trending upwards, and in fiscal 2016 it climbed 5% to $114.3 million. Higher net sales was offset to an extent by higher SGA costs, particularly pertaining to higher personnel, facility, and advertising costs and expenses.
The company's cash position weakened a touch, with cash from operations falling 21% to $64.2 million.
With its strength in leather goods, G-III does best in winter, and so is working to diversify its product range to be relevant to all seasons. G-III acquired Donna Karan International, which owns the Donna Karan and DKNY brands, in mid-2016 in order to diversify its product lines.
In February 2016, the company expanded its Tommy Hilfiger licensing arrangement through a new license for womenswear, which includes sportswear, suit separates, performancewear and denim. This is in addition the existing licenses for Tommy Hilfiger dresses, men’s and women’s outerwear and luggage.
Furthermore, in 2015, G-III acquired a 49% ownership interest brand rights to the Karl Lagerfeld trademarks for consumer products (with certain exceptions) and apparel in the United States, Canada and Mexico. It also in 2015 teamed up with talkshow host Jimmy Fallon to produce a line of semi-novelty apparel, High Hands, that features teams' logos on the garment's underarm area that becomes visible when a fan raises their arms in celebration.
Mergers and Acquisitions
G-III acquired Donna Karan International, which owns the Donna Karan and DKNY brands, in mid-2016 for around $650 million from LVMH. Donna Karan made its name in women's workwear in the '80s and '90s, but in recent years has struggled to turn a profit.
Chairman and CEO Morris Goldfarb and investment firm FMR LLC each own about 15% of G-III's shares. Royce & Associates owns about 10%.