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G-III Apparel (GIII) Buoyant on Brands & Digital Progress

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G-III Apparel Group, Ltd. (GIII - Free Report) looks well poised for growth, thanks to solid growth across its well-known brands and robust digital gains.

The company is quite optimistic about its five global power brands including DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. It is also effectively boosting its assortments. Coming to digital power, online sales of the company’s products have been surging for a while now. Management is also focused on updating websites to offer a seamless customer experience.

Delving Deeper

G-III Apparel, which shares space with Ralph Lauren (RL - Free Report) , is armed with a diversified portfolio of sturdy brands. Management expects the annual net wholesale sales potential for DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris brands to be $4 billion.  

Recently, the company entered into a long-term global licensing agreement with Inter Parfums (IPAR - Free Report) to develop and distribute fragrances and related products. Per the agreement, the companies will combine their expertise to introduce products under the Donna Karan and DKNY brand banners. Also, it agreed to acquire an iconic European luxury fashion brand Sonia Rykiel, which is likely to strengthen the company’s global footprint in the luxury space.

G-III Apparel is also witnessing momentum in casual categories with a potential to expand into the outdoor and sports market. The jeans category is a bright spot too. With respect to athleisure and sportswear, the company is consistently expanding its collections to cash in on consumers' growing demand.

The company had also successfully launched the Karl Lagerfeld Paris women's brand across 75 doors at Macy's (M - Free Report) . It remains on course to triple the distribution of its sportswear line to 250 doors by the end of fiscal 2022 and introduce a dress line to 75 doors by the forthcoming spring.

Speaking of G-III Apparel’s digital wing, management is on track to unveil the revamped websites of DKNY and Karl Lagerfeld Paris. These sites are likely to offer an immersive brand content to engage consumers, thus facilitating conversion to sales tools, such as virtual selling. It is steadily investing in data analytics capabilities to better know the consumers across channels and boost their shopping experiences. Management informed that the company is partnering with GEODIS, its logistics provider, to boost the direct-to-consumer capabilities.

Apparently, on the company’s retail partners' and its own sites, sales of the products surged more than 70% during second-quarter fiscal 2022 from the level achieved two years ago. In China, digital sales were stronger than the store sales in the reported quarter. Vilebrequin brand’s digital sites were up about 70% from the level recorded two years ago. Digital sales will continue making a significant contribution to its results going forward.

Bottom Line

Robust gains from the company’s assortments and digital business are steadily driving its performance. Its Wholesale unit also continues to be impressive.

Management is focused on expanding the international business. Aforesaid strengths helped G-III Apparel provide a solid view for the next fiscal year ending Jan 31, 2022.

Management anticipated net sales of $2.70 billion for the said full fiscal, indicating growth of about 31% from $2.06 billion delivered in fiscal 2021.