WWD.com/business-news/financial/g-iii-apparel-group-to-sell-15m-shares-of-common-stock-7756775/
government-trade
government-trade

G-III Apparel Group to Sell 1.5M Shares of Common Stock

The apparel firm said it intends to use the proceeds of the offering for general corporate purposes, which may include acquisitions.

G-III Apparel Group Ltd. plans to sell 1.5 million shares of its common stock in an underwritten public offering.

This story first appeared in the June 24, 2014 issue of WWD.  Subscribe Today.

Shares of G-III closed at $80.37 Monday in Nasdaq trading. The apparel firm could net $120.6 million from the sale at the current closing price. After expenses in connection with the offering, the apparel firm said it intends to use the proceeds of the offering for general corporate purposes, which may include acquisitions. A portion of the funds will be used to pay down outstanding debt under its credit agreement, with the balance of the net proceeds to be invested initially in short-term investment-grade securities.

According to G-III, the underwriters have a 30-day option to purchase up to an additional 225,000 shares of the common stock from the company.

The company earlier this month posted first-quarter results that beat Wall Street’s expectations by 21 cents.

For the three months ended April 30, net income rose 15.4 percent to $1.3 million, or 6 cents a diluted share, from $1.1 million, or 5 cents, a year ago. Wall Street was expecting a net loss per share of 15 cents. The company also beat Wall Street’s consensus estimate for sales as net sales increased 34.3 percent to $366.2 million from $272.6 million.

Morris Goldfarb, chairman, president and chief executive officer, in a conference call with Wall Street analysts after the company reported first-quarter results, said that his company is on the prowl for acquisitions. He also told analysts that G-III can handle acquisitions of $500 million businesses. The ceo noted that acquisition of a $30 million company is not that far different from acquiring a $500 million firm, and that smaller business are a “bit of a drain on our management team.”