G-III Apparel Group Ltd. has entered into a joint venture agreement with China Ting Group Holdings Ltd. to open and operate women’s Calvin Klein Performance stores in China and Hong Kong.
Under the terms of the agreement, G-III will retain a 51 percent ownership stake. G-III will operate the stores, which are expected to open this fall, under a license granted to it by Calvin Klein Inc. in December. The agreement gives G-III the right to open the stores in the U.S., China and Hong Kong, with rights to expand to additional countries. The first Calvin Klein Performance store opened in the U.S. last month in Scottsdale, Ariz. CKI is a wholly owned subsidiary of PVH Corp. G-III has had the women’s wholesale Calvin Klein Performance license since 2007.
The products offered will be women’s active apparel in the athletic and performancewear categories developed and produced under G-III’s license from CKI. They include pants, capris, shorts, tank tops, T-shirts and hooded jackets suitable for yoga, running, tennis and biking.
Morris Goldfarb, chairman and chief executive officer of G-III, said, “With strong relationships and an excellent track record, G-III and China Ting are well able to serve the market opportunity in China. China Ting has a precise understanding of what is necessary to successfully penetrate one of the most dynamic markets in the world. We are excited to take this step and further our strategic initiatives to diversify our company through global opportunities.”
Tom Murry, president and ceo of CKI, said, “G-III has demonstrated that they understand our consumer and can steward the brand across a number of important categories. We are excited to see G-III build upon the work they have done in the United States to further expand Calvin Klein Performance at retail in China and Hong Kong.”
Ting Hung Yi, ceo of China Ting, said, “We believe that the women’s Calvin Klein Performance apparel will resonate with a wide range of female consumers throughout China. We are confident that we can leverage our expertise to build a meaningful business for this iconic, global brand.”
Separately on Thursday, G-III posted fourth-quarter results for the three months ended Jan. 31.
The company said income fell 59.3 percent to $5 million, or 25 cents a diluted share, from $12.3 million, or 62 cents, a year ago. Sales rose 9 percent to $294.3 million from $270.2 million.
For the year, income fell 12.5 percent to $49.6 million, or $2.46 a diluted share, from $56.7 million, or $2.88, last year. Sales rose 15.8 percent to $1.23 billion from $1.06 billion.
Goldfarb said, “Although we achieved record sales in fiscal 2012, the record breaking warm weather was a major factor in our disappointing fourth-quarter performance. Having managed through fiscal 2012 gives us comfort for a more successful fiscal 2013.”
He added that the firm has several opportunities across its brands and categories that are “compelling.” The ceo cited dresses and its NFL sports licensed product as showing a strong increase in the order books, and that Calvin Klein handbags and luggage were also on track. The company is gearing up for the launch of Jessica Simpson outerwear for the fall season.
For the year ending Jan. 31, 2013, G-III provided guidance of $1.33 billion in sales, with income between $54 million and $56 million, or $2.62 to $2.72 a diluted share.
For the first quarter ending April 30, a loss is forecasted at between $400,000 and $1.2 million, or between 2 cents and 6 cents a share, on sales of $215 million. That’s compared with a loss of $520,000, or 3 cents a share, on sales of $196.9 million a year ago.