Count Morris Goldfarb as a brick-and-mortar believer.
Goldfarb, who is chairman and chief executive officer of G-III Apparel Group Ltd., turned in solid second-quarter results Thursday on the strength of his company’s wholesale business. G-III also boosted its outlook for the year and saw its stock rise 4.5 percent to $46.05 in trading on Thursday.
“Brick-and-mortar is not done,” Goldfarb said in an interview with WWD. “The consumer’s still spending a good deal of money in brick-and-mortar.”
At the same time, G-III is building on its digital business, which Goldfarb noted relies on stores. “As a consumer finds different avenues to acquire product, we just need to be part of it,” the ceo said.
Goldfarb also said the company’s 2016 acquisition of Donna Karan was paying off.
“It’s got an incredible amount of room left to go,” he said of the business, which includes Donna Karan and DKNY. “It’s still in very early-stage development. It’s met our expectations, even more so.”
G-III is centered around five businesses: the DKNY and Donna Karan brands, which it owns outright, and Calvin Klein, Tommy Hilfiger and Karl Lagerfeld, which it produces goods for under license.
The company’s second-quarter net income tallied $10.1 million, or 20 cents a share, marking a big swing from year-ago losses of $8.6 million, or 18 cents. Sales for the three months ended July 31 rose 16.1 percent to $624.7 million. (The firm had projected sales of $590 million with the bottom line ranging from earnings of $1.5 million to losses of $3.5 million.)
G-III is now looking for annual sales of about $3.06 billion and net income of $125 million to $130 million. Previously, the firm tagged full-year results at sales of $2.97 billion and net income of $112 million to $117 million.
There are a number of moving parts at the company, which for instance is in the process of closing 105 Wilsons and Bass stores, trimming the portfolio this year to 245 locations.
But DKNY is a big focus and showing signs of strength — including a 25 percent increase in comp sales at its outlet stores in the quarter.
Expect to see more of the brand generally.
There are about 45 DKNY stores now, with some likely to close.
But Goldfarb told analysts on a conference call, “You’re likely to see, as time goes on, more than 100 DKNY stores as we perfect the product and find the appropriate real estate for it.”
He also noted that the DKNY business stands at less than $100 million outside of North America and has “tremendous potential for growth.”