GIII CEO Morris Goldfarb Eyes $5B in Sales With a Changing Business, Tariffs and More

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GIII CEO Morris Goldfarb Eyes $5B in Sales With a Changing Business, Tariffs and More

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Morris Goldfarb knows his way around a crisis at G-III Apparel Group.  So while he is mindful of President Donald Trump’s trade wars and acknowledges that tariffs will likely force him to raise prices, Goldfarb also feels ready.  With more than 50 years as chief executive officer of G-III, he’s had some practice with disruption. “This company’s been around since 1956, and I can’t cite the number of crises that we’ve weathered,” Goldfarb told WWD. “A lot has been thrown at this company.”  Related Articles Human Resources From Runways to Resorts: Fashion Executives Are Reshaping Luxury Hospitality Sportswear Kate Moss Reunites With Donna Karan New York in Spring Campaign Just over two years ago, longtime partner PVH Corp. moved to take back its Calvin Klein and Tommy Hilfiger licenses for U.S. wholesale — essentially walking away with more than half of G-III’s business.  You May Also Like Since then the company has bounced back, focused on its owned brands; building up its Donna Karan business; signed a license for Converse apparel with Nike Inc., and more. G-III has been hyping its Donna Karan business with the help of Kate Moss. Courtesy While Goldfarb continues to keep an eye out for more deals, he said G-III has everything on board — including Donna Karan, DKNY, Karl Lagerfeld, Vilebrequin and more — to grow the company’s revenues from $3.18 billion last year to $5 billion down the line. And he said the impact of higher tariffs on goods made in China would be “far less painful” than the split with PVH, which is still phasing out its business with G-III.  “When you’re faced with it and you look at potential crisis of jobs and economics, you get rattled,” Goldfarb said of the transition away from Calvin Klein and Tommy Hilfiguer. “You may show a positive face, but at the end of the day you want proof. You yourself — meaning G-III — wanted to be secure in the fact that we could actually execute on everything we said. So one might say we’ve proved it out. “Our assets are everything we thought they’d be,” he said. “They’re better than our retailers thought they would be. And we’re expanding it and we beat our plan on our own brands.”  G-III’s fourth-quarter net income jumped 69 percent to $48.8 million, or $1.07 a diluted share, from $28.9 million, or 61 cents, a year earlier.  Adjusted earnings per share rose to $1.27 from 76 cents — coming in 30 cents ahead of the 97 cents analysts projected, according to Yahoo Finance.  Sales for the three months ended Jan. 31 rose 9.8 percent to $839.5 million. But 2025 is going to be a tricky year.  Sales, which rose 2.7 percent last year, are projected to drop slightly, to $3.14 billion in 2025, below the $3.23 billion analysts had penciled in.  The company will lose about $175 million in revenues from the Calvin Klein jeans and sportswear licenses reverted, which reverted back to PVH on Dec. 31. And tariffs will have their bite, although G-III is buying less of its inventory from China, where just over 30 percent of the company’s goods are now made.  Since taking office, Trump has raised tariffs on goods from China by 20 percent.  “More than likely we’ll raise our prices in the mid- to high-single digits,” Goldfarb said. “We’ll look at the volatility that we might expect on classifications of product. Clearly, we believe the consumer will adjust to a $5 to $10 increase in a coat.” But the company will have less wiggle room with a $5 T-shirt.  “We have a partnership with our vendors in most cases that goes on for decades,” Goldfarb said. “They’re all interested in maintaining their business and growing prosperity.”  The CEO is also nurturing new partnerships.  “Converse is a big win for ourselves and hopefully Nike will say the same thing a year from now,” he said. “Our order book is developing faster than we thought. It’s not a handful of accounts that are in fashion, it’s not a handful of department stores. It’s a diverse group of retailers, whether it’s big box retailers, whether it’s multibranded stores that specialize in the casual lifestyle sales and sporting good shops. So that’s an area that we are not well penetrated in. That has massive growth potential. So it’s a new area of focus for us and we’re liking it a lot.”

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