The losses continue for GIII- Apparel Group Inc.
The retailer, parent to the DKNY and Donna Karan brands, reported quarterly results Wednesday morning before the bell, falling short on both the top and bottom lines while it began the process of permanently closing all of its Wilsons Leather and G.H. Bass stores.
“The pandemic has had a major impact on the fashion industry and our second quarter results,” Morris Goldfarb, G-III’s chairman and chief executive officer, said in a statement. “Our customers now prefer casual, comfortable and functional attire. Through our broad range of brands and product categories, G-III is able to capitalize on these changing trends. We have reset our order book for the balance of the year and shifted our product assortment to athleisure, jeans, casual sportswear and coats.”
For the three-month period ending July 31, total company revenues fell nearly 54 percent to $297 million, down from $644 million the same time last year. Retail store revenues in the Wilsons Leather and G.H. Bass businesses, which GIII said in June it would permanently close later this year, were $19.7 million for the quarter, compared with $53.6 million during the same period a year earlier.
The company — which also includes Vilebrequin, Eliza J, Jessica Howard, Andrew Marc and Marc New York in the greater portfolio, in addition to fashion licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess, Vince Camuto, Levi’s and Dockers brands — lost nearly $15 million as a result, compared with profits of more than $11 million a year ago. That’s on top of more than $39 million in losses from the quarter before that.
The losses included about $25.6 million in lease termination fees, severance costs, store liquidation expenses and legal fees, among other things, as a result of the 110 Wilsons Leather and 89 G.H. Bass store closures, which commenced during the quarter.
G-III ended the quarter with nearly $253 million in cash and equivalents and about $409 million in long-term debt. The retailer anticipates revenues will decline between 28 percent and 33 percent during the back half of the year, compared with the same period in 2019.
“We refinanced our balance sheet and extended the maturity of our revolving credit facility and term debt to 2025,” Goldfarb said. “In addition, the closure of Wilsons Leather and G.H. Bass stores, expected to be completed by the end of this fiscal year, will result in the elimination of significant operating losses. I am confident that as we navigate through the pandemic, our financial strength and dedicated management team will further advance our leadership position and set the stage for future market share gains.”
Shares of G-III, which closed up 1.5 percent to $12.17 on Tuesday, are down more than 50 percent year-over-year.