G-III Apparel Group, the parent company of popular fashion brands DKNY and Donna Karan, has experienced a significant decline in net sales for the fiscal year ending January 31, 2021. The company’s annual revenue dropped to $2.06 billion, down from $3.16 billion in the previous year, marking a 35.0% decrease. G-III’s net income for the year also took a hit, coming in at $23.5 million, or $0.48 per diluted share, compared to $143.8 million, or $2.94 per diluted share, in the prior year.
The Covid-19 pandemic is the primary culprit behind this decline in revenue, as it has led to a surge in the demand for casual and comfortable clothing. G-III’s CEO, Morris Goldfarb, recognizes the importance of the company’s merchant-led focus and entrepreneurial culture in adapting to this trend and creating suitable merchandise for retail partners. He expresses confidence in G-III’s ability to navigate the changing market dynamics successfully.
To align with the challenging retail environment and streamline operations, G-III undertook a restructuring of its retail operations during the fiscal year. As part of this restructuring, the company permanently closed approximately 200 Wilsons Leather and G.H. Bass stores. While this decision may have had a short-term negative impact on revenue, G-III expects long-term benefits from the reorganization.
In the final quarter of the fiscal year, G-III’s net sales amounted to $526.2 million, reflecting a decrease of 30.3% compared to the same period in the previous year. The company’s quarterly net income stood at $14.6 million, or $0.30 per diluted share, in contrast to $25.3 million, or $0.52 per diluted share, in the prior year’s quarter.
Moving forward, G-III predicts net sales of approximately $460.0 million for the first quarter of the new fiscal year, as opposed to $405.1 million in the same period last year. Net income is projected to range between $0.05 and $0.15 per diluted share, a positive shift from the loss of $0.33 per share in the prior-year period. G-III anticipates a growing demand for dressier apparel and accessories as the year progresses and is actively collaborating with retail and vendor partners to meet this expected demand.
Despite the challenges brought by the pandemic, G-III remains confident in its ability to adapt and thrive in the ever-evolving fashion industry. The company’s focus on delivering the right products to its retail partners, coupled with its commitment to innovation and customer satisfaction, positions G-III for future success. With strong leadership and a clear vision, G-III is determined to overcome the obstacles presented by the current market conditions and emerge as a resilient and profitable force in the fashion industry.
Useful links:
– G-III Apparel Group Official Website
– Donna Karan Official Website
