G-III Sales Soar, Group Is On The Right Track

Spending $650 million from

After the group took over DKNY, the United States

Group G-III is on the right track.

According to the world clothing and shoe net, in the three months ended October 31st, the sales of DKNY parent G-III group (NASDAQ: GIII) rose 16% to 1 billion 20 million yuan, a new quarter sales volume, two Donna Karan and DKNY.

A total of $88 million has been contributed.

During the period, group net profit increased by 5% to 81 million 600 thousand dollars.

Earlier, chief executive Morris Goldfarb predicted that after adjusting the products of DKNY, sales in the next three to four years will reach US $1 billion, while Donna Karan sales will reach US $500 million in five years.

In the conference call after the earnings announcement, Morris Goldfarb said its third quarter results exceeded expectations, but he admitted that after the acquisition of Donna Karan International, the running between the two brands and groups was not smooth.

First, the creative director Dao-Yi Chow and Maxwell Osborne both quit. Donna Karan was unwilling to go back to the mountains again, and then to the excess stores caused by excessive expansion of Donna Karan and DKNY, resulting in the acquisition of the two brands did not make much contribution to the growth of group performance.

At present, the two brands of DKNY and Donna Karan are designed by the G-III group's internal design team. The team will redefine DKNY and Donna Karan on the basis of preserving the characteristics of Donna Karan designers as much as possible.

On line, the G-III group has shut down some unprofitable stores, and is looking for suitable solutions for unexpired tenancies.

In March this year, G-III group sold Donna Karan and DKNY's women's clothing licensing agency to Messi general store, and signed a licensing agreement with the CK parent PVH group in the US and Canada.

Robert Burke, chief executive officer of Robert Burke Associates, believes that G-III group is right with PVH group because DKNY and PVH group CK and Tommy will produce synergy, so that the group can also focus on producing products.

In October of this year, DKNY founder Donna Karan dealt a serious blow to the brand against improper remarks made by Hollywood tycoon Harvey Weinstein sexual assault.

Although Donna Karan immediately explained that she did not think Harvey Weinstein's behavior was correct, it was only based on what she had heard, but also rebuked Harvey Weinstein's sexual assault and was sorry for the victim, but it was too late.

Consumers said they would boycott the products of DKNY and Donna Karan, which indirectly led to a 6% drop in share prices of G-III group.

However, Morris Goldfarb did not disclose whether the incident had an impact on the DKNY and Donna Karan brand performance. However, he said that the group would always have a learning process when accepting new brands, and luckily, tuition fees were not expensive.

It is reported that G-III group plans to set up DKNY and Donna sales outlets in luxury stores such as Neiman Marcus, Saks Fifth Avenue, Nordstrom and Bergdorf Goodman to consolidate the high-end positioning of the brand.

G-III group, founded in 1956 by the Polish people Aron Goldfarb, is mainly engaged in clothing wholesale and retail business. At present, its own brands include Vilebrequin, Andrew Marc, Marc New York, Bass, G.H.Bass and so on.

Morris Goldfarb revealed that the wholesale business of all brands of G-III group has maintained strong growth, and the order quantity of Tommy Hilfiger and Karl Lagerfeld has doubled three times and two times respectively. The most important task of the group is to restructure the retail network.

To further enhance the profitability of the group, the group plans to convert the more expensive hot tourist area stores into Donna Karan and Karl Lagerfeld brands that are more popular among consumers, and appropriately reduce the stores of Wilsons Leather and G. H. Bass.

In terms of products, Morris Goldfarb believes that although consumers' buying preferences and habits are changing, their pursuit of quality products and services remains unchanged, so the group will continue to strive to produce high quality products for consumers in the future.

At the same time, G-III group will also increase capital investment in digital business, so that its brand will further globalized, especially in the Chinese market.

In August this year, G-III group and Fred Gehring's investment fund Amlon Capital BV established a partnership and established a joint venture to produce and sell men's clothing and accessories for DKNY and Donna Karan brands in China, including Hong Kong, Macao and Taiwan.

G-III will have a 49% stake in the joint venture and the remaining shares will be held by Amlon Capital BV.

The joint venture started with 25 million US dollars to strengthen the business growth of DKNY and Donna Karan brand in China.

China's DKNY and Donna Karan products will be made up of G-III group's distribution products and joint venture's specially designed products.

The joint venture will become the sole distributor in China since January 1, 2018.

The joint venture has replaced the previous distribution agreement in China, and the company will make profits through the authorized fees of Direct stores and distributors.

For the 2017 fiscal year, G-III Group expects full year sales to reach US $2 billion 800 million.

After the release of the earnings report, G-III group's share price rose 13.8% to $34.3 per share, a record high in the past year, and its current market value is about $1 billion 672 million.

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