NEW YORK — What started for Morris Goldfarb as a summer job in the Garment District has evolved into a $240 million business that now controls the lion's share of the outerwear business.
Years before he became chairman and chief executive of G-III Apparel Group, Goldfarb learned the ins and outs of the industry at G&N Sportswear, the leather coat company his father cofounded in 1956 that was renamed G-III in 1974.
Thirty-three years after joining the company full time, Goldfarb has been on the move, building G-III's portfolio with licensed brands such as Cole Haan, the Beyoncé Knowles-backed House of Deréon, Cece Cord and Kenneth Cole, as well as its own labels, including Siena Studio, Black Rivet and Colebrook.
Last month's acquisitions of J. Percy for Marvin Richards, which holds the licenses for Calvin Klein and St. John outerwear, and the Winlit Group, which has Guess outerwear, Tommy Hilfiger leather coats and Ellen Tracy among its licenses, should help increase G-III's total sales this year by 50 percent, Goldfarb said.
"What I think we get is the retailer — who is always looking to consolidate their matrix — maybe will take us more seriously as a key outerwear vendor. I never believe we have leverage over a retailer, but our history has proven our clients view us as a highly regarded resource," said Goldfarb during an interview last week in his office at 512 Seventh Avenue here.
He pointed to Calvin Klein "as the dominant brand in the outerwear business," and said bolstering its leather component will be a key piece in building that business. Conversely, Guess holds an opportunity in the active and wool business, as well as overseas.
G-III is considering opening yet-to-be-named outerwear stores in China, with the first aimed for Beijing. Each space would specialize in National Football League team apparel — one of the major-league and big-name sports organizations that G-III licenses under the supervision of former NFLer Carl Banks, vice president of sports licensing for G-III Sports. Unlike basketball and ping-pong, football is not a sport that is widely popular yet in China, Goldfarb said.
The China stores also would house areas for food and viewing sports on flat-screen TVs. The plan is to build a prototype and franchise the stores — ideally 50 units before the 2008 Olympics in Beijing.This would not be Goldfarb's first foray into the food business. He and a group of investors started the Rainforest Cafe in 1994 and sold it to Landry's a few years later for $125 million in cash and stock. Had the Rainforest figurines in his office not raised a question, that nugget, like many others about his other business endeavors, probably would not have been offered by Goldfarb.
Another nonapparel investment that paid off was being the largest shareholder of Pan Asia Bank, a five-branch operation based in Fort Lee, N.J., that was sold to Penn National Bank in 2000. Goldfarb also funded the management buyback of Wilson's Leather Goods in 1997. More recently, he and Michael Gold spearheaded the initiative to buy Wet Seal, a deal that closed in January. "We do a lot of stuff," he explained.
In terms of G-III stuff, there are plans to open the company's first European office within the next 12 months. In addition to its retail initiative in China, G-III has a joint venture there and is working "quite aggressively" with 20 G-III employees overseeing the work of 2,000 factory workers. By having such a presence there, G-III is able to produce hard-to-service orders, special cuttings and quick turns, such as catalogue orders, that work with shorter windows. Located in Qingdao in the Shandong province, the factory is capable of producing 80,000 garments a month, which covers 15 percent of G-III's total needs. The remaining production is handled by 70 other factories, Goldfarb said.
G-III's success and Goldfarb's diversified ventures are quite a feat, considering his late father was a Holocaust survivor with a second-grade education who immigrated from Poland in 1956. The elder Goldfarb went into the outerwear business as a way to earn a living after a stint as a construction worker and another as a laundromat owner, his son said. He then decided to use the know-how he'd acquired as an apprentice to a shoemaker in his homeland to start a leather business that specialized in women's coats.
At this stage, Goldfarb does not plan to open any stores in the U.S. There will be a major push with print advertising, especially in regard to Black Rivet, Marvin Richards and Siena Studio outerwear, as well as Cece Cord handbags, for fall 2006. G-III holds the long-term master license for all products for Cord, which will introduce small leather goods and gloves for fall 2006.Until then, G-III will be busy reminding retailers, especially major chains, that outerwear is not just for cold winter months. "It doesn't have to be a warm, functional garment. If the fashion is right, there is business to be done for an extended period of time," Goldfarb said.
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