G-III Apparel Group Ltd., whose volume is fast approaching $1 billion, has been transformed into a more well-rounded firm.
Originally an outerwear resource, G-III has diversified into a sportswear, dress and outerwear manufacturer with an assortment of labels, ranging from Calvin Klein, Guess, Kenneth Cole, Tommy Hilfiger, Cole Haan and Ellen Tracy to Andrew Marc, Sean John, Vicky Tiel and Jessica Simpson.
“Historically we made money in the third quarter and broke even in the fourth quarter, and in the first and second quarters we lost a little bit. We got very accustomed to it and never failed. It’s the model you live with” as an outerwear firm, said Morris Goldfarb, 59, chairman and chief executive officer, who’s run the business for the last 38 years. “The warehouse would coast eight months a year. Now it’s active 12 months a year. It’s peak season every day.”
A key growth engine at G-III is the Calvin Klein business, its biggest and fastest growing licensed brand. G-III holds the licenses for Calvin Klein sportswear, dresses, suits, performance wear and outerwear, and recently signed deals for handbags, cold-weather accessories and luggage. “There isn’t a piece of the Calvin Klein business that’s not doing well,” said Goldfarb. G-III has eight individual licenses with Phillips-Van Heusen Corp., which owns the Calvin Klein business, and G-III is the third largest licensee for Calvin Klein, said Goldfarb, after Warnaco Group Inc., which does Calvin Klein jeans and underwear, and Coty Inc., the fragrance licensee.
In August 2008, PVH shifted the better price sportswear license, which had been struggling under Kellwood Co., to G-III. “It was profitable in the first six months,” said Goldfarb.Sammy Aaron, vice chairman of G-III, oversees the Calvin Klein division. The Calvin Klein sportswear is produced in 40 countries around the world.
In February 2008, G-III acquired Andrew Marc, the outerwear company, and now makes Andrew Marc and Marc New York outerwear and dresses in-house, licensed men’s jeans to Jones Apparel Group Inc. and handbags and cold-weather accessories to Fownes. G-III is considering opening Andrew Marc retail stores, and expects to sign several new licenses shortly. In July 2008, G-III also purchased certain aspects of Wilson’s The Leather Experts Inc. The 130-unit outlet chain lost money in the first year, but broke even in the second year.Seventy percent of Wilson’s merchandise is private label.Wilson’s will open 10 more locations this year, said Goldfarb.
While G-III is busy with these licensed and directly owned businesses, Goldfarb said he always has his eye out for acquisitions. “Our preference is to own brands. We have capital to acquire companies. Our balance sheet is amazing, and we have no long-term debt. We have $50 million in cash on hand, and a $350 million credit facility,” said Goldfarb. Ideally, a target company would generate volume between $150 million and $200 million.
G-III, which went public in 1989, was founded by Goldfarb’s father, Aron, as G&N Sportswear in 1956. Morris Goldfarb’s son, Jeff, a lawyer, joined the company eight years ago and is involved with the business development side.
Today, 65 percent of G-III’s business is licensed, and 35 percent is directly owned brands. G-III is the largest outerwear company in the U.S. and is among the top three in dresses, said Goldfarb. Its customers range from Bloomingdale’s, Macy’s, Lord & Taylor and Nordstrom, to J.C. Penney, Kohl’s, Costco and Sam’s Club.
In terms of how large he’d like the company to become, Goldfarb replied: “I want it to be as big as possible with appropriate controls we can handle. It’s a highly complex business,” he said, referring to the multitude of brands and businesses.Even with all the consolidation at retail several years ago, Goldfarb said it didn’t impact the company because, at the time, G-III was mostly in outerwear and hadn’t diversified. “We weren’t in the other categories when all the consolidation took place. With these dominant brands [now], stores are eager to give you space. We’ve been in a growth mode for six years,” he said. By the end of the year, G-III will have 13 floors of 512 Seventh Avenue in Manhattan — it currently occupies six — and plans to bring all the businesses under one roof. It has an option for another floor in 2013.
In the last four years, G-III’s volume has grown to $800.9 million in fiscal 2010 from $324 million in fiscal 2006.
Known at one point as G-III Leather Fashions, the firm today is much less dependent on the leather business. Leathers represent only 10 percent of the company’s business, or $100 million. As the company has became less dependent on seasonal merchandise, net sales in the months of July through November accounted for about 64 percent of the company’s net sales in fiscal 2010, versus 70 percent in fiscal 2009 and 75 percent in fiscal 2008.
Guess outerwear is a bright spot at the company, as is Kenneth Cole New York’s women’s and men’s outerwear business, which is expected to drum up $60 million in sales this year.Jessica Simpson Dresses, which is geared to a young, contemporary customer, is on target to increase sales by 20 percent.
Meantime, private label is a growing business. The firm does private label programs with stores such as J.C. Penney, Kohl’s and Kmart, which account for 20 percent of the business and is increasing. The sports division, which generates $100 million in sales, includes the National Football League and Major League Baseball licenses, as well as college apparel.
“The growth of the company will be through organic growth,” said Goldfarb, noting he expects to do about $200 million in volume with the new Calvin Klein luggage and handbags, and the Calvin Klein sportswear and dresses still have major growth potential. Goldfarb said he’s looking to expand more aggressively throughout Europe and is considering expansion in China. “There are opportunities throughout the company to show growth without an acquisition,” he said.
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)