The acquisitions of Andrew Marc and Wilsons stores lifted revenues at G-III Apparel Group Ltd. in the second quarter, but they also boosted quarterly losses.
This story first appeared in the September 10, 2008 issue of WWD. Subscribe Today.
For the quarter ended July 29, the net loss at the New York-based outerwear and sportswear firm grew to $3.9 million, or 23 cents a diluted share, from $884,000, or 5 cents a share, in the same period last year. Analysts had expected a loss of 24 cents.
Sales for the quarter jumped 35.2 percent to $113.5 million from $83.9 million a year ago.
Last month, G-III acquired the license for Calvin Klein better women’s sportswear previously held by Kellwood. The firm also holds the license for Calvin Klein Inc. suits, dresses and coats. In July, the company bought the Wilsons The Leather Experts name and operations for $22.3 million. Earlier this year, G-III acquired outerwear and handbag maker Andrew Marc for $42 million.
“We expect this year-round business to be a meaningful vehicle to grow sales and earnings in the near future,” said Morris Goldfarb, chairman and chief executive officer, of the new Calvin Klein deal, “and to help offset the seasonality associated with our core outerwear business and newly acquired retail business.”
The company blamed the second-quarter red ink on seasonal losses at Andrew Marc and Wilsons. Goldfarb said the company had booked well for fall and that G-III is positioned to benefit from its recent acquisitions in the holiday season.
“Our non-outerwear businesses continue to perform at a high level,” he noted. “Our dress business, led by Calvin Klein, continued to post increased sales and profitability.”
In the first half of the year, G-III’s net losses rose to $10.7 million, or 65 cents a share, from $7.3 million, or 46 cents a share, last year.
Sales for the first half rose 58.7 percent to $188.9 million, from $119 million a year ago.