By  on December 5, 2017

The holiday season is shaping up to be an upbeat one for vendors as well as retailers — and they remain bullish about the months ahead.After PVH Corp. trumpeted a 6 and 10 percent sales increase for Calvin Klein and Tommy Hilfiger, respectively, and VF Corp. recorded a 5 percent increase in revenues, G-III Apparel Group said Tuesday that third-quarter sales grew by 16 percent, while profits rose to 15.6 percent to $81.6 million from $70.6 million.       G-III’s strong performance pushed the stock up 13.8 percent to $34.40, a high for the last year and a big swing from the end of fiscal 2016, when the company saw profits fall by more than half and shares hit a four-year low.A similar swing has been the story at PVH and VF, as the trio of wholesale-driven companies has seen headwinds constantly brought up at the start of the year, like foot-traffic declines and a shift to digital shopping, either to dissipate or be overcome.PVH’s stock hit a five-year low of $68.34 in mid-2016, but after months of chief executive officer Emanuel Chirico sounding a cautionary tone, things started to look up in the second quarter and that upward trajectory has continued, sending shares toward their second-highest level of $137.31 at the start of December. Chirico also said he was seeing “positive” sales trends in North America, which has been a particular struggle for PVH brands and many others. VF also saw its stock drop off in mid-2016, hitting $54.98, but it’s slowly made its way back up since the company showed signs of sales improvement last spring that have carried through the year so far. Shares hit one of the company's highest levels of $70.39 this month and now ceo Steve Rendle has the company on the acquisition path.PVH and VF have increased their full-year guidance as a result of their third-quarter results, as did G-III, which is now expecting earnings up to $71 million, well above the $60 million projected before.With sales trending up since the Thanksgiving holiday, these companies are probably feeling secure in their immediate outlooks. Research from Adobe found that a record $6.59 billion was spent online on Cyber Monday alone, an increase of 16.8 percent, or nearly $1 billion, over last year. Industry experts are widely expecting holiday sales to increase around 4 percent this year, which would be the best performance since 2014.G-III is optimistic about the holiday season, with ceo Morris Goldfarb saying the company is “positioned well for the future” during a call with financial analysts. But a year of owning and operating the Donna Karan and DKNY brands had him alluding to “some mistakes” made along the way to the $88 million in sales the brands generated in the third quarter.When thinking of mistakes, one’s mind may go to October remarks by the brands’ founder Donna Karan in defense of Harvey Weinstein soon after the movie mogul was alleged to be a serial harasser of women in The New York Times and The New Yorker. Although Karan has not been formally associated with either brand since 2015, G-III’s stock took a hit and a call on social media to boycott the brands gained steam before Karan apologized repeatedly, starting with WWD.But there was also the short-lived design leadership at DKNY of Dao-Yi Chow and Maxwell Osborne, who were tapped to succeed Karan and Jane Chung. The Public School duo was ousted not long after G-III in 2016 finalized a $650 million deal to acquire Donna Karan International from LVMH Moët Hennessy Louis Vuitton.“There is a learning curve, and we have learned quickly what’s good and what is not,” Goldfarb said when discussing the brands’ strong third-quarter during a call with financial analysts. “Fortunately for us, the learnings were not costly. We responded.”Now there is what Goldfarb referred to as his overall group’s “retail problem,” marked by too many unprofitable stores, a solution to which is evolving. In addition to DKI, G-III owns brands such as Vilebrequin, G.H. Bass, Andrew Marc, Marc New York, Eliza J and Jessica Howard. It also makes licensed goods under Calvin Klein, Tommy Hilfiger, Guess, Vince Camuto, Ivanka Trump and more.“There are certainly stores that are profitable, but unfortunately a significant number that are not,” Goldfarb said.The plan includes identifying larger stores in expensive tourist-driven areas and converting them for more popular brands, like the Donna Karan lines and Karl Lagerfeld Paris, in which G-III also has a stake. There is also the ongoing closure of scores of stores, mainly for the company’s Wilson and Bass brands.“We dealt with the biggest losers first,” Goldfarb said of the retail strategy. “We didn’t renew leases that expired. We’re in the middle of negotiating a reasonable solution to our biggest losing store, and it will have an early termination, and it might involve a conversion for the couple of years that might remain with it — we’re very happy with the progress.”Goldfarb added, however, that the company has yet to embark on simply buying its way out of untenable leases, but that’s on the table for the first quarter of next year “if it doesn’t get significantly better.”“The mission is to cure the retail problem; that’s one of the primary missions this company has,” he said.Looking to 2018, the ceo revealed that model Emily Ratajkowski will continue on through next year as the face of DKNY, and that there are plans to focus on building up specialty retail and for “deeper penetration into top-tier retailers,” like Neiman Marcus, Saks Fifth Avenue, Nordstrom and Bergdorf Goodman.G-III is also investing more into its digital business and continuing to expand globally for the first time, with the Donna Karan brands leading the way.“There are opportunities in Europe that we really don’t have in North America,” Goldfarb said. “There are probably north of 500 new doors that provide opportunities for us in Europe, whether there’s small specialty stores or they’re department stores with multiple locations, and we’re making our mark very, very quickly.”For More, See:Amazon Introduces Full Retail Offering in AustraliaGucci Investigated for Alleged Tax EvasionHudson’s Bay and Land and Buildings Reach Settlement

To continue reading this article...

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus