G-III Apparel Forecasts $500-$700 Million in Licensed DKNY/Donna Karan Product Sales

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IL0402dkny3G-III Apparel is forecasting $500-$700 million in annual retail sales of DKNY/Donna Karan licensed products within the next few years, CEO Morris Goldfarb said in releasing Q4 earnings.

Since buying the brands in 2016, G-III has moved to expand a licensing program, most recently with agreements with Swarovski (fashion jewelry) and Marchon (eyewear). It also recently added deals in Europe for men’s underwear, swim suits, socks and loungewear. G-III’s Donna Karan/DKNY wholesale/licensing revenue is expected to increase 20% in the year ending in January 2020, company executives said.

“The licensing business is not only profitable, but is key to expanding the brand’s global presence,” said Goldfarb.

Sales of G-III ‘s core DKNY/Donna Karan dresses, sportswear, footwear and handbags rose 50% to $400 million in Q4 ended Jan. 31;with a goal of reaching $1 billion annually?? in the “near future,” Goldfarb said. Donna Karan/DKNY sales have grown as distribution expanded outside a one-time exclusive at Macy’s, Goldfarb said. Since the exclusive ended, DKNY/Donna Karan footwear and sportswear have moved into 150 locations of another department store chain, he said.

Sales of brands for which G-III has licenses increased. Sales of Tommy Hilfiger (licensed from PVH Corp.) footwear, men’s suits, dresses and outerwear jumped 45% in the just-ended year to $400 million. Revenue from Karl Lagerfeld Paris apparel, which G-III first launched in 2016, increased 40% to $100 million. Revenue from the Calvin Klein license topped $1 billion.

G-III reported a $24 million Q4 profit, reversing a year-earlier $524,000 loss as revenue rose 7.3% to $766.7 million. Wholesales revenue increased 13% to $639 million. G-III’s revenue from company-owned stores, which include Karl Lagerfeld, Donna Karan/DKNY, Wilsons Leather and G.H. Bass & Co. stores, fell 13% in Q4 to $155 million. G-III had 31 Donna Karan/DKNY stores at year-end and plans to convert about 10 Wilsons and G.H. Bass & Co. locations to the brand. G-III ended the year with 308 stores, down from 411 a year earlier, and plans to close another 43 this year. It has a joint venture and licensing agreement with Amlon Capital for DKNY and Donna Karan in China for apparel, handbags luggage and accessories. The joint venture has also opened 50 DKNY/Donna Karan locations in China since launching in August 2017.

Contact:

G-III Apparel, Neal Nachman, CFO, 212-403-0500